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The R&D Market Pulse Index for the week ending November 3, 2017 closed at 3,797.68 for the 25 companies in the R&D Index. The Index was up 1.44 percent (or 53.75 basis points) over the week ending October 27, 2017. Sixteen R&D Index companies gained value last week from 0.12 percent (Cisco) to 13.27 percent (Qualcomm). Nine R&D Index companies lost value last week from -0.14% (Pfizer) to -5.15 percent (General Motors).
The Labor Department reported last week that U.S. unemployment dropped to 4.1 percent, its lowest point since December 2000. Analysts noted that this was not all good news, in that the economy now risks overheating with scarce labor, routine record high stock prices and stimulative tax cuts potentially coming with President Trump’s tax bill revisions. Trump nominated Federal Reserve governor Jerome Powell to be the next chairman of the Federal Reserve following the expiration of Janet Yellen’s four-year term in February 2018. While at the Fed, Powell has been a reliable ally of Yellen and would likely continue the Fed’s cautious approach to reversing the Fed’s stimulus policies and push for additional rate increases in 2018 and beyond.
Congressional House Republicans revealed their tax plans last week, which include dropping the corporate tax rate from 35 percent to 20 percent. The proposal ran into immediate resistance from organizations whose deductions would be reduced or eliminated. The bill would also eliminate the electric vehicle tax credit, reducing the incentives for battery-powered automobiles just as manufacturers are ramping up production on them. Republicans are pushing for immediate consideration of the plan with the House Ways and Means committee starting considerations this Monday.
R&D Index member Toyota released information on how it plans to integrate artificial intelligence software into its future vehicles. Toyota’s AI project Yui: is projected to be an onboard virtual assistant that gauges the driver’s mood and offers to drive verbally if it senses the driver is sleepy or distracted. The company plans to start testing Yui:-equipped vehicles on Japanese roads by 2020.
In its continuing legal battle with communications-chip supplier and R&D Index member Qualcomm (over royalty fees), R&D Index member Apple noted last week that it plans to reduce or stop using those chips in products it plans to introduce next year. Replacement chips would be sourced from R&D Index member Intel by Apple.
| R&D Index Week Ending November 3, 2017 |
| Ticker | Exchange | 2017 R&D billions$ | 10/27/17 | 11/03/17 | 11/3/17 to 10/27/17 | 11/3/17 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 1,100.95 | 1,111.60 | 0.97% | 48.24% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,033.67 | 1,049.99 | 1.58% | 32.50% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 83.81 | 84.14 | 0.39% | 35.40% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 44.40 | 46.34 | 4.37% | 27.76% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 163.05 | 172.50 | 5.80% | 48.94% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 35.90 | 38.40 | 6.96% | 33.89% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 28.62 | 29.10 | 1.68% | 2.00% |
| 8 | Toyota | TM | NYSE | 9,170 | 124.23 | 125.62 | 1.12% | 7.18% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 141.78 | 140.08 | -1.20% | 21.59% |
| 10 | Novartis | NVS | NYSE | 7,870 | 80.72 | 83.70 | 3.69% | 14.91% |
| 11 | General Motors | GM | NYSE | 7,468 | 44.64 | 42.34 | -5.15% | 21.53% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 35.60 | 35.55 | -0.14% | 9.45% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 59.94 | 62.22 | 3.80% | 6.47% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 34.43 | 34.47 | 0.12% | 14.06% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 54.57 | 61.81 | 13.27% | -5.20% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 50.88 | 50.18 | -1.38% | 30.51% |
| 17 | Honda | HMC | NYSE | 6,519 | 30.93 | 32.87 | 6.27% | 12.61% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 33.49 | 34.48 | 2.96% | 26.21% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 58.24 | 56.06 | -3.74% | -4.77% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 71.11 | 73.25 | 3.01% | 3.58% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 111.70 | 116.00 | 3.85% | 17.02% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 47.53 | 45.74 | -3.77% | 13.11% |
| 23 | IBM | IBM | NYSE | 4,628 | 153.68 | 151.58 | -1.37% | -8.68% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 36.23 | 36.15 | -0.22% | -6.13% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 83.86 | 83.51 | -0.42% | 13.54% |
| Total | 209,080 | 3,743.93 | 3,797.68 | 1.44% | 27.34% | |||
| Biopharmaceutical | 717.68 | 722.59 | 0.68% | 11.97% | ||||
| Automotive | 306.81 | 312.48 | 1.85% | 11.35% | ||||
| ICT | 1,618.49 | 1,651.01 | 2.01% |
26.36% |
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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.
