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The R&D Index: Market Watch for the week ending January 13, 2017 closed at 1,571.61 for the 25 companies in the R&D Index. The Index was down -0.13% (or 2.04 basis points) over the week ending January 6, 2017. Eleven R&D Index companies gained value last week from 0.39% (Siemens) to 3.75% (General Motors). Fourteen R&D Index companies lost value last week from -0.22% (Microsoft) and to -6.22% (Bristol-Myers Squibb).

At his news conference last Wednesday, President-elect Trump commented on the high price of drugs and stated that he would change the bidding process to lower the costs paid by the federal government for pharmaceuticals. As a result of his comments (no details or timeline was provided), many pharmaceutical stocks fell on Wednesday and the Nasdaq Biotechnology index fell nearly 3% in one day. Some of the stocks recovered a small amount on Thursday and Friday, but overall the R&D Index biopharmaceutical companies were off 0.5% for the week. Only three of the eleven biopharm R&D Index companies saw a profit for the week—Merck, Astra Zeneca and Lilly—and these three also dropped in value on Wednesday, but their recoveries offset the drops by Friday.

Volkswagen last week agreed to pay $4.3 billion in fines to the U.S. in connection with its falsification of diesel-vehicle emission. The fines consist of $2.8 billion in criminal fines and $1.5 billion in civil penalties. These fines are in addition to $17.5 billion in civil claims the company has agreed to pay to consumers, regulators, dealers and state attorneys general in the U.S. VW also claimed last week that it is the world's largest car makers by sales, although U.S. sales continue to fall from about 420,000 in 2012 to 323,000 in 2016. VW has the largest market share in China which is also the world's largest market for vehicles.

Federal Reserve presidents noted in the past week that they continue to expect to put two to four quarter-point interest rate increases in place in 2017, although they did not state when those increases would be made. The Wall Street Journal's latest survey of business economists noted that the 2017 economy would likely continue to expand especially with Trump's business friendly regulatory changes, tax cuts and infrastructure spending. The economists also noted that there's a good chance that Congress will dilute or delay Trump's fiscal stimulus programs.

Studies released last week by Gartner and IDC revealed that PC shipments continued their slide in 2016 for the fifth year in a row. PC sales have slowed due to consumer shifts to tablets and smartphones. Technology improvements from PC  R&D Index suppliers Intel, Cisco, Oracle and Apple haven't been sufficient enough to drive real market growth, according to the analysts.

R&D Index Week Ending January 13, 2017

                 
    Ticker Exchange 2015 R&D billions$ 01/06/17 01/13/17 1/13/17 to 1/6/17 1/13/17 to 1/1/16
1 Microsoft MSFT NASDAQ 12,448 62.84 62.70 -0.22% 13.01%
2 Intel INTC NASDAQ 12,128 36.48 36.79 0.85% 6.79%
3 Roche Pharm RHHBY OTC 10,242 29.78 29.62 -0.54% -14.07%
4 Toyota TM NYSE 9,112 120.13 119.81 -0.27% -2.63%
5 Johnson & Johnson JNJ NYSE 9,046 116.30 114.60 -1.46% 11.57%
6 Novartis NVS NYSE 8,935 73.49 72.40 -1.48% -15.89%
7 Apple AAPL NASDAQ 8,397 117.91 119.04 0.96% 13.09%
8 Pfizer PFE NYSE 7,690 33.48 32.52 -2.87% 0.40%
9 General Motors GM NYSE 7,500 35.99 37.34 3.75% 9.79%
10 Merck & Co. MRK NYSE 6,704 60.27 62.34 3.43% 18.02%
11 Ford Motor F NYSE 6,700 12.76 12.63 -1.02% -10.36%
12 Cisco CSCO NASDAQ 6,411 30.23 30.07 -0.53% 10.71%
13 Oracle ORCL NYSE 6,042 38.45 39.26 2.11% 7.47%
14 Astra Zeneca PLC AZN NYSE 5,997 28.43 28.58 0.53% -15.82%
15 Honda HMC NYSE 5,990 30.47 30.08 -1.28% -5.79%
16 Bristol-Myers Squibb BMY NYSE 5,920 59.95 56.22 -6.22% -18.28%
17 Qualcomm QCOM NASDAQ 5,833 65.53 66.88 2.06% 33.81%
18 Sanofi SA SNY NYSE 5,519 40.32 41.47 2.85% -2.77%
19 Eli Lilly Co LLY NYSE 5,331 75.67 77.40 2.29% -5.74%
20 GlaxoSmithKline GSK NYSE 5,250 39.38 39.22 -0.41% -2.80%
21 IBM IBM NYSE 5,247 169.53 167.34 -1.29% 21.63%
22 Daimler DDAIY OTC 5,169 72.04 71.33 -0.99% -8.43%
23 Siemens SIE XETRA 4,929 115.95 116.40 0.39% 29.51%
24 Bayer AG BAYN XETRA 4,649 102.40 101.65 -0.73% -12.52%
25 Ericsson ERIC NASDAQ 4,124 5.87 5.92 0.85% -38.40%
      Total 175,313 1573.65 1571.61 -0.13% 3.29%
                 
      Biopharmaceutical 659.47 656.02 -0.52% -5.56%
      Automotive 271.39 271.19 -0.07% -3.48%
      ICT   520.97 522.08 0.21% 16.94%

About the R&D Index

R&D Magazine's R&D Index is a weekly stock market summary of the top international companies involved in research and development. The top 25 industrial spenders of R&D in 2015 were selected based on the latest listings from Schonfeld & Associates' June 2016 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT  (7) and conglomerate (2) organizations who invested a cumulative total of more than $175 billion in R&D in 2015, or approximately 11% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine's 2016 Global R&D Funding Forecast. The stock prices used in the R&D Index are tabulated from NASDAQ, NYSE, XETRA and OTC common stock prices (in U.S. dollars) for the companies selected at the close of stock trading business on the Friday preceding the publication of the R&D Index in R&D Magazine's R&D Daily eNewsletter.

The companies used in the R&D Index include Microsoft, Intel, Roche Holdings, Novartis, Johnson & Johnson, Pfizer, Toyota Motor, General Motors, Merck & Co., Ford Motor, Cisco, Apple Computer, Sanofi SA, Qualcomm, IBM, Astra Zeneca plc, Honda Motor, Daimler, Oracle, GlaxoSmithKline, Siemens, Eli Lilly Co., Ericsson, Bristol-Myers Squibb and Bayer AG. Stock prices are based on those stocks traded on the U.S. exchanges. R&D Index trends (in the stock prices) are just one indicator of the amount of capital available to these high-technology companies to invest in R&D and should not be implied to indicate the absolute value of R&D investments made by these organizations. The companies chosen for the R&D Index have very large sophisticated internal and global R&D organizations with each company investing between $4.1 and $12.4 billion annually on their R&D efforts.

 

 

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