The R&D Market Pulse Index for the Holiday-shortened week ending December 29, 2017 closed at 3,850.96. The Index was down -0.59 percent (or 23.02 basis points) from the week ending December 22, 2017. Ten R&D Index companies gained value last week from 0.04 percent (Microsoft) to 3.24 percent (Astra Zeneca). Fifteen R&D Index companies lost value last week from -0.16 percent (Merck & Co.) to -3.30 percent (Apple).

Twenty-one R&D Index companies grew their stock values during 2017 from 0.11 percent (Daimler) to 55.96 percent (Amazon). Four companies ended the year with lower values than on January 1, 2017 including Qualcomm (-1.81 percent), Merck (-4.42 percent), IBM (-7.57 percent) and GlaxoSmithKline (-7.89 percent). Of these four, only Merck is expected to increase its R&D spending in 2018 (by about 2 percent to $10.2 billion). The other three are expected to reduce their R&D investments in 2018 by up to 9 percent. The overall average stock value growth for the 25 companies was 29.12 percent for the year. The R&D Index stocks outperformed the DJIA which saw 25.1 percent growth for the year, which was its best year since 1999 (25.2 percent growth).

With the dramatic growth seen in 2017, analysts are expecting possibly similar growth in 2018. Global growth estimates by the IMF and World Bank had already forecast (for two years) stronger global growth in 2018 than in 2017 and there has been no letup on those predictions. In the U.S., the end of 2017 finished with a flourish outpacing earlier U.S. growth forecasts. The strong growth is also carrying over into forecasts for 2019, which initially were projected to be down slightly from the 2018 growth numbers.

From a technology standpoint there is no lack of new technologies expected to be introduced in 2018. A wide range of less expensive electric vehicles are expected to be introduced in 2018 including new models from Nissan, Toyota, Chevrolet, Honda and Tesla. R&D Index growth leader Amazon is also expected to continue its expansion (and R&D investments) in unexplored areas like appliances, pharmaceuticals, and office services. The loss of regulations on net neutrality has already launched a plethora of new private and local government providers that will offer new services. And smartphones will also see rapid expansions in software, along with the expansion of artificial intelligence in all things electronic which will continue unabated.

Effects of the 4.1 percent low unemployment figures were seen in several areas over the past few weeks as delivery companies pressed office personnel into service to handle an overflow of online purchase deliveries. Snow removal services also experienced difficulties in manning their equipment due to the inabilities of finding workers.

R&D Index Week Ending December 29, 2017

		Ticker	Exchange	2017 R&D billions$	12/22/17	12/29/17	12/29/17 to 12/22/17	12/19/17 to 1/1/17
1	Amazon	AMZN	NASDAQ	17,774	1,168.36	1,169.47	0.10%	55.96%
2	Alphabet/Google	GOOGL	NASDAQ	15,845	1,068.86	1,053.40	-1.45%	32.93%
3	Microsoft	MSFT	NASDAQ	13,987	85.51	85.54	0.04%	37.66%
4	Intel	INTC	NASDAQ	13,499	46.70	46.16	-1.16%	27.27%
5	Apple	AAPL	NASDAQ	11,506	175.01	169.23	-3.30%	46.11%
6	Volkswagen AG	VLKAY	OTC	11,260	40.58	40.44	-0.34%	41.00%
7	Roche Pharm	RHHBY	OTC	10,174	31.13	31.58	1.45%	10.69%
8	Toyota	TM	NYSE	9,170	128.32	127.17	-0.90%	8.51%
9	Johnson & Johnson	JNJ	NYSE	9,060	140.12	139.72	-0.29%	21.27%
10	Novartis	NVS	NYSE	7,870	82.95	83.96	1.22%	15.27%
11	General Motors	GM	NYSE	7,468	42.02	40.99	-2.45%	17.65%
12	Pfizer	PFE	NYSE	7,288	36.14	36.22	0.22%	11.51%
13	Bristol-Myers Squibb	BMY	NYSE	6,942	60.96	61.28	0.52%	4.86%
14	Cisco	CSCO	NASDAQ	6,827	38.55	38.30	-0.65%	26.74%
15	Qualcomm	QCOM	NASDAQ	6,723	64.73	64.02	-1.10%	-1.81%
16	Oracle	ORCL	NYSE	6,702	47.36	47.28	-0.17%	22.96%
17	Honda	HMC	NYSE	6,519	34.30	34.08	-0.64%	16.75%
18	Astra Zeneca PLC	AZN	NYSE	6,363	33.61	34.70	3.24%	27.01%
19	Merck & Co.	MRK	NYSE	5,759	56.36	56.27	-0.16%	-4.42%
20	Daimler	DDAIY	OTC	5,084	71.31	70.80	-0.72%	0.11%
21	Bayer AG	BAYN	XETRA	4,880	105.45	104.00	-1.38%	4.91%
22	Sanofi SA	SNY	NYSE	4,755	42.95	43.00	0.12%	6.33%
23	IBM	IBM	NYSE	4,628	152.50	153.42	0.60%	-7.57%
24	GlaxoSmithKline	GSK	NYSE	4,508	35.13	35.47	0.97%	-7.89%
25	Eli Lilly Co	LLY	NYSE	4,489	85.07	84.46	-0.72%	14.83%
	Total			209,080	3,873.98	3,850.96	-0.59%	29.12%
			Biopharmaceutical		709.87	710.66	0.11%	10.13%
			Automotive		316.53	313.48	-0.96%	11.71%
			ICT		1,679.22	1,657.35	-1.30%	26.85%

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.