The R&D Market Pulse Index for the Holiday-shortened week ending January 5, 2018 closed at 4016.68 for the 25 companies in the R&D Index. The Index was up 4.46 percent (or 171.52 basis points) from the week ending December 29, 2017. Twenty-three R&D Index companies gained value last week from 1.00 percent (Bristol-Myers Squibb) to 7.37 percent (General Motors). Two R&D Index companies lost value last week from -0.07 percent (Pfizer) to -2.62 percent (Intel).
Intel’s large loss last week reflects a security flaw found by Intel researchers that was announced last Tuesday. While the stock took a modest hit, the short-term outlook remains positive due to Intel’s more than 90 percent market share of microprocessors for PCs and data center servers. The longer-term outlook is less positive, as Nvidia and Advanced Micro Devices come out with new chips. Google also has announced it is looking into designing and producing its own chip for cloud applications and China is also continuing to invest in its own microprocessor infrastructure. Any Intel chip erosion will take many years to be seen, with Intel researchers continuing to counter competitive pressures with their own new products.
Payrolls rose by 148,000 in December according to a U.S. Labor Department report on Friday, capping 2.1 million employment gains in 2017 and the seventh consecutive year of annual increases of more than two million. Unemployment remained at 4.1 percent for the third straight month. Hiring has now risen for 87 consecutive months, the longest job expansion on record. Analysts expect that the tax reduction bill that just passed could continue the hiring trend well into 2018 by stimulating consumer spending—2018 could also see another 2 million employment gain as a result.
The U.S. auto industry suffered its first sales decline in 2017 in more than eight years, while still selling more than 17 million vehicles for the third consecutive year. Manufacturers, however, are concerned that the sales decline could be more than a blip following strong recent sales, rising interest rates and a growing used car market. Market analyst IHS Markit forecast last week that 2018 sales will fall to 16.9 million vehicles.
New European regulations designed to make their financial systems safer failed to work over the past two weeks as money market interest rates plummeted to -4.4 percent on the last day of trading in 2017, similar to the problem seen at the end of 2016. The damage was significantly less than was seen last year as traders this time planned their actions earlier in December.
About the R&D Market Pulse Index
R&D Magazine’s R&D Market Pulse 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 2017 were selected based on the latest listings from Schonfeld & Associates’ June 2017 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (8) and conglomerate (1) organizations who invested a cumulative total of more than $209 billion in R&D in 2017, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2017 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 Amazon, Alphabet/Google, Microsoft, Intel, Apple, Volkswagen AG, Roche Pharma, Toyota, Johnson & Johnson, Novartis, General Motors, Pfizer, Bristol-Myers Squibb, Cisco, Qualcomm, Oracle, Honda Motor Company, Astra Zeneca plc, Merck & Company, Daimler, Bayer AG, Sanofi SA, IBM, GlaxoSmithKline and Eli Lilly Co. 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 $4.5 and $17 billion annually on their R&D efforts.
R&D Index Week Ending January 5, 2018
| Ticker | Exchange | 2017 R&D billions$ | 12/29/17 | 01/05/18 | 1/5/18 to 12/29/17 | 1/5/18 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 1,169.47 | 1,229.14 | 5.10% | 63.91% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,053.40 | 1,110.29 | 5.40% | 40.11% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 85.54 | 88.19 | 3.10% | 41.92% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 46.16 | 44.95 | -2.62% | 23.93% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 169.23 | 175.00 | 3.41% | 51.10% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 40.44 | 43.20 | 6.82% | 50.63% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 31.58 | 32.38 | 2.53% | 13.49% |
| 8 | Toyota | TM | NYSE | 9,170 | 127.17 | 133.86 | 5.26% | 14.22% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 139.72 | 141.71 | 1.42% | 23.00% |
| 10 | Novartis | NVS | NYSE | 7,870 | 83.96 | 86.27 | 2.75% | 18.44% |
| 11 | General Motors | GM | NYSE | 7,468 | 40.99 | 44.01 | 7.37% | 26.32% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 30.42 | 30.40 | -0.07% | -6.40% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 61.28 | 61.89 | 1.00% | 5.90% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 38.30 | 39.53 | 3.21% | 30.81% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 64.02 | 66.47 | 3.83% | 1.95% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 47.28 | 48.47 | 2.52% | 26.06% |
| 17 | Honda | HMC | NYSE | 6,519 | 34.08 | 35.62 | 4.52% | 22.03% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 34.70 | 35.87 | 3.37% | 31.30% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 56.27 | 56.99 | 1.28% | -3.19% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 70.80 | 72.98 | 3.08% | 3.20% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 104.00 | 108.22 | 4.06% | 9.17% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 43.00 | 44.67 | 3.88% | 10.46% |
| 23 | IBM | IBM | NYSE | 4,628 | 153.42 | 162.49 | 5.91% | -2.11% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 35.47 | 37.51 | 5.75% | -2.60% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 84.46 | 86.57 | 2.50% | 17.70% |
| Total | 209,080 | 3,845.16 | 4,016.68 | 4.46% | 34.68% | |||
| Biopharmaceutical | 704.86 | 722.48 | 2.50% | 11.96% | ||||
| Automotive | 313.48 | 329.67 | 5.16% | 17.48% | ||||
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ICT | 1,657.35 | 1,735.39 | 4.71% | 32.82% | |||
