The R&D Market Pulse Index for the week ending August 4, 2017 closed at 3,457.98 for the 25 companies in the R&D Index. The Index was down -0.98% (or 34.37 basis points) over the week ending July 28, 2017. Thirteen R&D Index companies gained value last week from 0.60% (IBM) to 4.61% (Apple). Twelve R&D Index companies lost value last week from -0.33% (Astra Zeneca) to -3.18% (Amazon).
On Friday, the Dept. of Labor reported that the U.S. added 209,000 jobs to the workforce in July. This marks the 82nd consecutive month in which the U.S. has created jobs, almost three years longer than the previous record from 1986 to 1990. The Labor Dept. also reported that the unemployment rate fell to 4.3%, after rising slightly in June. The continued economic growth in the U.S. and abroad, high jobs figures, low unemployment and reasonable inflation rates approaching 2% reinforce the Fed’s plans to implement their third short-term interest rate increase of 2017, which is now likely to occur at their scheduled September 19-20 meeting.
R&D Index member Toyota announced on Friday that it planned to build a new $1.6 billion automobile factory in the U.S. with collaborator Mazda. The site of the factory was not revealed, but Toyota stated that it was scheduled to open by 2021. Toyota already has six plants in the midwest and southern U.S. building cars, SUVs, small trucks and engines.
Oil prices rose last week after data from the U.S. Energy Information Administration (EIA) revealed that crude oil inventories have continued to shrink while gasoline demand continued to climb to a new record last week. Oil prices rose above $50 last Monday for the first time in two months and finished the week above $52. While demand and prices have climbed, shale oil producers have dropped their production costs to less than $40/barrel, while traditional oil producers including ExxonMobil, Royal Dutch Shell, ConocoPhillips, and ChevronTexaco also have lowered their production costs to less than $40/barrel. Additionally, the OPEC organization is now considering the effect of their earlier cutbacks which were meant to raise oil prices and drive the shale oil producers out of business. All of these events are unlikely to inspire oil producers to increase their R&D investments any time soon, which were significantly reduced following the oil price crash. Analysts now state that the return to high oil prices is never likely to happen, especially with the trends toward electrification of personal and commercial vehicles.
| R&D Index Week Ending August 4, 2017 |
| Ticker | Exchange | 2017 R&D billions$ | 07/28/17 | 08/04/17 | 8/4/17 to 7/28/17 | 8/4/17 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 1,020.04 | 987.58 | -3.18% | 31.70% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 958.33 | 945.79 | -1.31% | 19.35% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 73.04 | 72.68 | -0.49% | 16.96% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 35.31 | 36.30 | 2.80% | 0.08% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 149.50 | 156.39 | 4.61% | 35.03% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 31.62 | 31.04 | -1.83% | 8.23% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 31.29 | 31.92 | 2.01% | 11.88% |
| 8 | Toyota | TM | NYSE | 9,170 | 112.26 | 113.64 | 1.23% | -3.04% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 131.85 | 133.18 | 1.01% | 15.60% |
| 10 | Novartis | NVS | NYSE | 7,870 | 84.75 | 84.97 | 0.26% | 16.65% |
| 11 | General Motors | GM | NYSE | 7,468 | 35.77 | 35.27 | -1.40% | 1.23% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 33.15 | 33.64 | 1.48% | 3.57% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 55.27 | 55.95 | 1.23% | -4.26% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 31.52 | 31.80 | 0.89% | 5.23% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 52.88 | 52.62 | -0.49% | -19.29% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 50.30 | 49.96 | -0.68% | 29.94% |
| 17 | Honda | HMC | NYSE | 6,519 | 27.66 | 28.37 | 2.57% | -2.81% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 30.27 | 30.17 | -0.33% | 10.43% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 64.11 | 63.10 | -1.58% | 7.19% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 59.85 | 60.53 | 1.14% | -14.41% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 107.70 | 107.00 | -0.65% | 7.94% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 47.56 | 48.08 | 1.09% | 18.89% |
| 23 | IBM | IBM | NYSE | 4,628 | 144.29 | 145.16 | 0.60% | -12.55% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 40.93 | 40.53 | -0.98% | 5.25% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 83.10 | 82.31 | -0.95% | 11.91% |
| Total | 209,080 | 3,492.35 | 3,457.98 | -0.98% | 15.95% | |||
| Biopharmaceutical | 709.98 | 710.85 | 0.12% | 10.15% | ||||
| Automotive | 267.16 | 268.85 | 0.63% | -4.20% | ||||
| ICT | 1,495.17 | 1,490.70 | -0.30% | 14.10% | ||||
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.
