Advertisement

The R&D Index: Market Watch for the week ending April 7, 2017 closed at 1,622.86 for the 25 companies in the R&D Index. The Index was down -1.00% (or -16.43 basis points) over the week ending March 31, 2017. Twenty-two R&D Index companies lost value last week from -0.11% (Intel) to -4.92% (Honda). Two R&D Index companies gained value last week, from 0.30% (Johnson & Johnson) to 1.44% (Eli Lilly Co.) – Siemens remained unchanged for the week at 128.4.

Following several years of working to reduce expenditures and costs, major energy companies continue to struggle to break even from the lower oil prices, even with a modest rebound recently. Royal Dutch Shell and Exxon Mobil, for example, had stronger 4Q 2016 revenue results than they've seen in several years according to a recent report, although their cash flows are still negative. In their efforts to reduce spending, Shell was estimated to reduce its 2017 R&D spending by 12% to $0.9 billion, while Exxon Mobil was forecast to reduce its 2017 R&D by 23% to $0.7 billion, according to an R&D forecast. BP is expected to reduce its R&D by 28% to $0.3 billion and Chevron is forecast to reduce its R&D by a large 43% to $0.26 billion. Crude oil prices ended last week above $52/barrel.

R&D Index member Ford Motor announced last week that it would start building electric cars in China in 2018 to take advantage of a China-sponsored boom in green-energy vehicles. Despite concerns about the loss of technology-based intellectual property (IP) to China, the growth in the electric car industry will occur first in China, according to analysts. Ford has a joint venture with Changan Ford Automobile and expects to start building its Mondeo Energi plug-in hybrid vehicle in China in 2018. A new all-electric sport utility vehicle is scheduled to follow by 2021. Electric powertrains will be manufactured in China by 2020. More than 500,000 electric or hybrid vehicles were sold in China in 2016 with most of them manufactured by Chinese companies without any foreign involvement. Ford stock was basically unchanged following their Chinese manufacturing announcement.

Hiring slowed in March, according to a Labor Department report released last week, to 98,000 much lower than in previous months this year (216,000 in January and 219,000 in February). However, the unemployment rate still dropped to 4.5%, the lowest rate since May 2007. Many of the recent hires have been in the construction market which has been buoyed by warm weather. Construction managers continue to be concerned by a lack of qualified job applicants.

The International Monetary Fund (IMF) is expected to release its semi-annual global economic forecast on Monday, April 10 (the second report is released in mid-October). The forecast is expected to show continued modest global growth, in line with the forecast presented in October 2016.

      R&D Index Week Ending April 7, 2017      
    Ticker Exchange 2015 R&D billions$ 03/31/17 04/07/17 4/7/17 to 3/31/17 4/7/17 to 1/1/16
1 Microsoft MSFT NASDAQ 12,448 65.86 65.68 -0.27% 18.38%
2 Intel INTC NASDAQ 12,128 36.07 36.03 -0.11% 4.59%
3 Roche Pharm RHHBY OTC 10,242 32.03 31.92 -0.34% -7.40%
4 Toyota TM NYSE 9,112 108.62 105.91 -2.49% -13.92%
5 Johnson & Johnson JNJ NYSE 9,046 124.55 124.92 0.30% 21.61%
6 Novartis NVS NYSE 8,935 74.27 73.72 -0.74% -14.36%
7 Apple AAPL NASDAQ 8,397 143.66 143.34 -0.22% 36.18%
8 Pfizer PFE NYSE 7,690 34.21 34.10 -0.32% 5.28%
9 General Motors GM NYSE 7,500 35.36 33.71 -4.67% -0.88%
10 Merck & Co. MRK NYSE 6,704 63.54 63.13 -0.65% 19.52%
11 Ford Motor F NYSE 6,700 11.64 11.23 -3.52% -20.30%
12 Cisco CSCO NASDAQ 6,411 33.80 32.96 -2.49% 21.36%
13 Oracle ORCL NYSE 6,042 44.61 44.29 -0.72% 21.24%
14 Astra Zeneca PLC AZN NYSE 5,997 31.14 30.30 -2.70% -10.75%
15 Honda HMC NYSE 5,990 30.26 28.77 -4.92% -9.90%
16 Bristol-Myers Squibb BMY NYSE 5,920 54.38 53.42 -1.77% -22.36%
17 Qualcomm QCOM NASDAQ 5,833 57.34 56.32 -1.78% 12.68%
18 Sanofi SA SNY NYSE 5,519 45.25 44.81 -0.97% 5.06%
19 Eli Lilly Co LLY NYSE 5,331 84.11 85.32 1.44% 1.28%
20 GlaxoSmithKline GSK NYSE 5,250 42.16 41.47 -1.64% 2.78%
21 IBM IBM NYSE 5,247 174.14 172.14 -1.15% 25.12%
22 Daimler DDAIY OTC 5,169 69.20 67.00 -3.18% -13.99%
23 Siemens SIE XETRA 4,929 128.40 128.40 0.00% 42.86%
24 Bayer AG BAYN XETRA 4,649 108.05 107.50 -0.92% -7.49%
25 Ericsson ERIC NASDAQ 4,124 6.64 6.47 -2.56% -32.67%
      Total 175,313 1639.29 1622.86 -1.00% 6.66%
                 
      Biopharmaceutical 693.69 690.61 -0.44% -0.58%
      Automotive 255.08 246.62 -3.32% -12.23%
      ICT   555.48 550.76 -0.85% 23.37%
Advertisement
Advertisement