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The R&D Market Pulse for the holiday-shortened week ending June 9, 2017 closed at 1,645.27 for the 25 companies in the R&D Market Pulse Index. The Index was down -1.44% (or 24.01 basis points) over the week ending June 2, 2017. Only four R&D Index companies gained value last week from 0.71% (Pfizer) to 1.35% (IBM). Twenty-one R&D Index companies lost value last week from -0.08% (Siemens) to -6.87% (Roche Pharm).

Most biopharm and automotive R&D Index stocks slid all week long to close at -1.28% and -1.67% respectively for the week from the previous week's closing values. The ICT R&D Index stocks were flat for most of the week, but fell dramatically on Friday, along with other related tech stocks, such as Google/Alphabet, Amazon, Advanced Micro Devices (AMD) and Facebook, which all fell more than 3% on Friday. There was no single indicator that drove the sell-off of these particular tech stocks, they all drove each other as one started to fall, they all started to fall following several months of mostly exaggerated growth over the past three months. The tech-heavy Nasdaq took the brunt of this sell-off dropping 2.7% on Friday, while the DJIA closed at a record high, buoyed by banking and energy stocks.

OPEC's policies to drive U.S. shale oil producers out of business have failed and the current crude oil prices of less than $50/barrel have similarly failed to curtail U.S. shale production. Shale producers have actually increased their productivities, thus lowering their costs. Exports are booming to existing clients such as China which increased their oil imports by nearly 2,400% over 2016 and new clients such as India (1.5 billion barrels imported in 2017), Hong Kong (0.7 billion barrels imported in 2017) and Denmark (0.7 billion barrels imported in 2017).

The Dept. of Labor revised its worker productivity for 1Q to flat (0.0% change) from its previous estimate of a -0.6% annual decline over 2016. This is marginally good news for the economy, however it still reveals a sluggish growth environment.

A report from the World Bank last week revealed their forecast for the fastest growth period in seven years for 2018. The development institution stated that global growth would increase to 2.9% in 2018, up from 2.7% in 2017. The report cautioned that the build-up of China's internal  debt could jeapardize global growth. Trade-war fears could also affect the economic situation.

The report also warned that while President Trump's proposed corporate and personal tax cuts could boost near term GDP by nearly 2 percentage points after two years, those cuts would also widen the budget deficit by up to 2.4 percentage points over the same period.

      R&D Index Week Ending June 9, 2017      
    Ticker Exchange 2015 R&D billions$ 06/02/17 06/09/17 6/9/17 to 6/2/17 6/9/17 to 1/1/16
1 Microsoft MSFT NASDAQ 12,448 71.76 70.32 -2.01% 26.75%
2 Intel INTC NASDAQ 12,128 36.32 35.71 -1.68% 3.66%
3 Roche Pharm RHHBY OTC 10,242 34.37 32.01 -6.87% -7.14%
4 Toyota TM NYSE 9,112 109.37 105.74 -3.32% -14.06%
5 Johnson & Johnson JNJ NYSE 9,046 130.08 131.53 1.11% 28.05%
6 Novartis NVS NYSE 8,935 82.23 81.14 -1.33% -5.74%
7 Apple AAPL NASDAQ 8,397 155.45 148.98 -4.16% 41.54%
8 Pfizer PFE NYSE 7,690 32.54 32.77 0.71% 1.17%
9 General Motors GM NYSE 7,500 34.45 34.34 -0.32% 0.97%
10 Merck & Co. MRK NYSE 6,704 65.47 64.39 -1.65% 21.90%
11 Ford Motor F NYSE 6,700 11.35 11.13 -1.94% -21.01%
12 Cisco CSCO NASDAQ 6,411 31.98 31.37 -1.91% 15.50%
13 Oracle ORCL NYSE 6,042 45.66 45.03 -1.38% 23.27%
14 Astra Zeneca PLC AZN NYSE 5,997 35.11 34.17 -2.68% 0.65%
15 Honda HMC NYSE 5,990 28.69 27.94 -2.61% -12.50%
16 Bristol-Myers Squibb BMY NYSE 5,920 54.97 53.75 -2.22% -21.88%
17 Qualcomm QCOM NASDAQ 5,833 58.58 57.05 -2.61% 14.15%
18 Sanofi SA SNY NYSE 5,519 50.01 48.20 -3.62% 13.01%
19 Eli Lilly Co LLY NYSE 5,331 80.13 81.04 1.14% -3.80%
20 GlaxoSmithKline GSK NYSE 5,250 44.37 43.51 -1.94% 7.83%
21 IBM IBM NYSE 5,247 152.05 154.10 1.35% 12.01%
22 Daimler DDAIY OTC 5,169 65.84 65.46 -0.58% -15.97%
23 Siemens SIE XETRA 4,929 129.50 129.40 -0.08% 43.97%
24 Bayer AG BAYN XETRA 4,649 121.60 119.05 -2.10% 2.45%
25 Ericsson ERIC NASDAQ 4,124 7.40 7.14 -3.51% -25.70%
      Total 175,313 1669.28 1645.27 -1.44% 8.13%
                 
      Biopharmaceutical 730.88 721.56 -1.28% 3.87%
      Automotive 249.70 244.61 -2.04% -12.94%
      ICT   551.80 542.56 -1.67% 21.53%

R&D Magazine's R&D Index is a weekly stock market summary of the top international companies involved in research and development. 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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