The R&D Market Pulse Index for the week ending August 25, 2017 closed at 3,396.13 for the 25 companies in the R&D Index. The Index was up 0.37% (or 12.57 basis points) over the week ending August 18, 2017. Twenty-two R&D Index companies gained value last week from 0.21% (Qualcomm) to 3.52% (Cisco). Three R&D Index companies lost value last week from -0.72% (Microsoft) to 1.34% (Amazon).

The U.S. federal debt limit (currently at slightly less than $20 trillion) needs to be reset by the end of the current fiscal year on September 30 or risk default. Investors are concerned about the political situation involved in these discussions and the possibility of a default as nearly occurred in 2011, when the S&P 500 fell 17% in two weeks. As a result, T-bills maturing in mid-October now have higher yields than those in late-November, an unusual situation for fixed-income securities, which typically yield more for longer maturities. The stock market has not reacted yet to these events, but is likely to over the next several weeks if a political stalemate occurs over setting a new debt limit.

News surfaced last week that China’s Great Wall Motor Co. was considering making an offer for the profitable Jeep division of Fiat Chrysler Automobiles (FCA). FCA is struggling to partner with a larger company to fund the R&D needed to develop electric and autonomous vehicles over the next ten years. China’s Geely Automobile Holdings bought Volvo from Ford Motor Co. in 2010 with the Volvo brand now prospering better than it was under Ford ownership. Ford Motor also announced last week that it would start a new company to make electric cars in China. The new company is a proposed joint venture with Anhul Zotye Automobile, an electric car specialty company, would produce cars under an indigenous brand, rather than the Ford marque. Ford already operates two other joint ventures with China’s Changan Automobile and Jiangling Motors.

European anti-trust regulators last week stated that R&D Index member Bayer AG will face deeper scrutiny than normal in its proposed takeover of Monsanto. The European Commission (EC) stated  that the proposed $57 billion deal of the two large genetically engineered seed and pesiticide companies would put pressure on European farmers who already are struggling with low crop prices. Regulators have completed their initial probes, but will need until January to fully complete their evaluations. Bayer and Monsanto have a combined 2017 R&D spending of $6.5 billion ($4.88 and $1.66 billion, respectively.)

R&D Index Week Ending August 25, 2017

	Ticker	Exchange	2017 R&D billions$	08/18/17	08/25/17	8/25/17 to 8/18/17	8/25/17 to 1/1/17
Amazon	AMZN	NASDAQ	17,774	958.47	945.26	-1.34%	26.06%
Alphabet/Google	GOOGL	NASDAQ	15,845	926.18	930.50	0.47%	17.42%
Microsoft	MSFT	NASDAQ	13,987	72.49	72.82	0.46%	17.19%
Intel	INTC	NASDAQ	13,499	35.01	34.67	-0.97%	-4.41%
Apple	AAPL	NASDAQ	11,506	157.50	159.86	1.50%	38.02%
Volkswagen AG	VLKAY	OTC	11,260	30.66	31.28	2.02%	9.07%
Roche Pharm	RHHBY	OTC	10,174	31.23	31.60	1.18%	10.76%
Toyota	TM	NYSE	9,170	111.73	112.84	0.99%	-3.72%
Johnson & Johnson	JNJ	NYSE	9,060	132.63	131.68	-0.72%	14.30%
Novartis	NVS	NYSE	7,870	82.76	83.53	0.93%	14.68%
General Motors	GM	NYSE	7,468	34.83	35.60	2.21%	2.18%
Pfizer	PFE	NYSE	7,288	32.67	33.39	2.20%	2.80%
Bristol-Myers Squibb	BMY	NYSE	6,942	56.42	58.37	3.46%	-0.12%
Cisco	CSCO	NASDAQ	6,827	30.37	31.44	3.52%	4.04%
Qualcomm	QCOM	NASDAQ	6,723	51.92	52.03	0.21%	-20.20%
Oracle	ORCL	NYSE	6,702	48.62	49.24	1.28%	28.06%
Honda	HMC	NYSE	6,519	27.54	27.97	1.56%	-4.18%
Astra Zeneca PLC	AZN	NYSE	6,363	29.12	29.24	0.41%	7.03%
Merck & Co.	MRK	NYSE	5,759	61.49	62.94	2.36%	6.91%
Daimler	DDAIY	OTC	5,084	60.31	62.17	3.08%	-12.09%
Bayer AG	BAYN	XETRA	4,880	107.90	109.00	1.02%	9.96%
Sanofi SA	SNY	NYSE	4,755	48.19	48.70	1.06%	20.43%
IBM	IBM	NYSE	4,628	139.70	143.74	2.89%	-13.40%
GlaxoSmithKline	GSK	NYSE	4,508	38.75	39.47	1.86%	2.49%
Eli Lilly Co	LLY	NYSE	4,489	77.07	78.79	2.23%	7.12%
Total			209,080	3,383.56	3,396.13	0.37%	13.87%
		Biopharmaceutical		698.23	706.71	1.21%	9.51%
		Automotive		265.07	269.86	1.81%	-3.84%
		ICT		1,461.79	1,474.30	0.86%	12.84%

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.