The R&D Index: Market Watch for the week ending October 6, 2017 closed at 3,581.51 for the 25 companies in the R&D Index. The Index was up 2.11% (or 74.03 basis points) over the week ending September 29, 2017. Twenty-three R&D Index companies gained value last week from 0.02% (GlaxoSmithKline) to 11.27% (General Motors). Two R&D Index companies lost value last week from -0.07% (Novartis) to -0.84% (Roche Pharm).
The U.S. lost 33,000 jobs in September, which is the first loss in seven years, according to the Dept. of Labor. Some of these losses resulted from Hurricane Harvey, which struck Texas in August and Hurricane Irma which struck Florida in September. Employment in food service fell 105,000 in September, which had grown by 29,000/month since early 2017. These data are based on surveys of businesses. A separate survey of households revealed a strong employment market, rising by 906,000 in September with unemployment falling to 4.2%, the lowest point since 2001. The employment and economic activity needed to rebuild the Texas and Florida areas devastated by the hurricanes is expected to be seen in future months. Car sales are also expected to spike as owners replace their water-damaged vehicles.
All of these are positive data and likely to keep the Federal Reserve on course to implement its third 2017 interest rate hike in December. It appears that Janet Yellen is no longer being considered for a second Fed chair term when her current term expires in February. President Trump is interviewing two Fed governors, Kevin Warsh and Jerome Powell, to replace her. Both are more hawkish than Yellen and would likely continue the Fed’s record of interest rate hikes, only on a faster schedule, which would increase the dollar in global markets.
The European Union last week ordered Luxembourg to recoup $294 million in unpaid taxes over an eight year period from R&D Index member Amazon. The EC also ordered Ireland last year to retrieve roughly $14 billion in uncollected taxes from R&D Index member Apple. Ireland has yet to retrieve the Apple taxes. The EC is also considering additional regulations to force digital companies such as R&D Index member Google and Facebook to pay more taxes in Europe.
Ford announced last week that it plans to shift about $7 billion in funds (including R&D) toward the development of more trucks, SUVs and electric vehicles. Ford was forecast to spend approximately $7.8 billion in R&D alone in 2018, and increase of about 3% over what it invested in 2017. The shift would take away or delay funds from the development of traditional vehicles.
| R&D Index Week Ending October 6, 2017 |
| Ticker | Exchange | 2017 R&D billions$ | 09/29/17 | 10/06/17 | 10/6/17 to 9/29/17 | 10/6/17 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 961.35 | 989.58 | 2.94% | 31.97% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 973.72 | 993.64 | 2.05% | 25.39% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 74.49 | 76.00 | 2.03% | 22.30% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 38.08 | 39.63 | 4.07% | 9.26% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 154.12 | 155.30 | 0.77% | 34.09% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 33.80 | 34.80 | 2.96% | 21.34% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 32.00 | 31.73 | -0.84% | 11.22% |
| 8 | Toyota | TM | NYSE | 9,170 | 119.17 | 121.87 | 2.27% | 3.98% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 130.01 | 133.22 | 2.47% | 15.63% |
| 10 | Novartis | NVS | NYSE | 7,870 | 85.85 | 85.77 | -0.07% | 17.75% |
| 11 | General Motors | GM | NYSE | 7,468 | 40.38 | 44.93 | 11.27% | 28.96% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 35.70 | 36.05 | 0.98% | 10.99% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 63.74 | 64.81 | 1.68% | 10.90% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 33.63 | 33.75 | 0.36% | 11.68% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 51.84 | 52.49 | 1.25% | -19.49% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 48.35 | 48.40 | 0.10% | 25.88% |
| 17 | Honda | HMC | NYSE | 6,519 | 29.56 | 30.09 | 1.79% | 3.08% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 33.88 | 34.26 | 1.12% | 25.40% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 64.03 | 64.55 | 0.81% | 9.65% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 67.47 | 68.70 | 1.82% | -2.86% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 115.30 | 117.20 | 1.65% | 18.23% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 49.79 | 50.57 | 1.57% | 25.05% |
| 23 | IBM | IBM | NYSE | 4,628 | 145.08 | 146.48 | 0.96% | -11.75% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 40.60 | 40.61 | 0.02% | 5.45% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 85.54 | 87.08 | 1.80% | 18.40% |
| Total | 209,080 | 3,507.48 | 3,581.51 | 2.11% | 20.09% | |||
| Biopharmaceutical | 736.44 | 745.85 | 1.28% | 15.58% | ||||
| Automotive | 290.38 | 300.39 | 3.45% | 7.04% | ||||
| ICT | 1,519.31 | 1,545.69 | 1.74% | 18.30% | ||||
About the R&D Index
R&D Magazine’s R&D 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.
