The R&D Market Pulse Index for the week ending December 8, 2017 closed at 3,835.48. The Index was up 0.35 perecent (or 13.38 basis points) from the week ending December 1, 2017. Seven R&D Index companies gained value last week from 0.03 percent (Cisco) to 2.94 percent (Daimler). Eighteen R&D Index companies lost value last week from -0.02 percent (Oracle) to -5.30 percent (Roche Pharm).
The Labor Dept. announced on Friday that non-farm payrolls rose a seasonally adjusted 228,000 in November, following a 244,000 gain in October. This marks the 86th straight month of expansion, helping to maintain the 4.1 percent unemployment rate for November, a 17-year low. These data likely will point to the third straight quarter of near-3 percent growth. These data also set up 2018 to have the best global growth since the global recession in 2010. The negative news from the Labor Dept. was that wages only increased $0.05 after declining in October. The Fed is still likely to increase short-term interest rates this week to a range between 1.25 percent to 1.50 percent. The low wage improvements and low inflation rate (still not meeting their target 2.0 percent) may cause the Fed to reconsider their three (or possibly even four) rate increases in 2018, two in 2019 and one in 2020. Jerome Powell’s ascendancy to Fed chair in February and the filling of several open positions cause analysts to question the future Fed’s plans when all slots are filled.
GE last week announced it was cutting 12,000 jobs (or 18 percent of its workforce) at its energy division, citing reduced demand for traditional turbines for coal and gas-fired power plants. The cuts were not unexpected as the company reorganizes with a new CEO. Its major competitor, Siemens, said in November that it would cut 6,900 jobs to combat weak demand.
R&D Index member General Motors announced last week that it will put carbon-fiber reinforcements in the beds of its large pick-up trucks, following a lead by Ford several years ago that put high strength aluminum in its pick-up truck beds to save weight and increase gas mileage.
Ireland is expected to start collecting $15.5 billion in back taxes from R&D Index member Apple next year following an escrow accord.
The Trump Administration last week announced that it would roll out its new national security policy over the next several weeks, stating it would contain a tough new approach to confront global security challenges. The strategy will address the North Korean nuclear threat, global terrorism, Iranian meddling, China’s growing influence in Asia and Russian aggression and propaganda efforts in the West.
|R&D Index Week Ending December 8, 2017|
|Ticker||Exchange||2017 R&D billions$||12/01/17||12/08/17||12/8/17 to 12/1/17||12/18/17 to 1/1/17|
|Johnson & Johnson||JNJ||NYSE||9,060||139.98||140.59||0.44%||22.03%|
|Astra Zeneca PLC||AZN||NYSE||6,363||32.85||32.74||-0.33%||19.84%|
|Merck & Co.||MRK||NYSE||5,759||55.87||55.57||-0.54%||-5.61%|
|Eli Lilly Co||LLY||NYSE||4,489||85.32||86.45||1.32%||17.54%|
About the R&D Market Pulse 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.