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.
