The R&D Index for the week ending June 1, 2018 closed at 4,338.22 for the 25 companies in the R&D Index. The Index was up 2.38% (or 100.90 basis points) from the week ending May 25, 2018. Sixteen R&D Index companies gained value last week from 0.68% (Bristol-Myers Squibb) to 12.79% (General Motors). Nine R&D Index companies lost value last week from -0.04% (Roche Pharm) to -4.70% (Daimler).
The U.S. Dept. of Labor reported on Friday that the U.S. unemployment rate had dropped to 3.8%, the lowest since April 2000. Employers added 233,000 jobs in May, extending the job expansion rate to a record 92 months. Unemployment for women dropped to 3.6% in May, the lowest since 1953. Unemployment rates for most minorities and educational groups also dropped to record lows. Stocks responded to these reports by rising on Friday, which recouped most of the losses for earlier part of the week.
The unemployment rate is also an indirect indicator of an increasing demand of skilled workers in the technology sector. According to a report last week in the Wall Street Journal, universities are awarding more PhDs in fields like math, computer sciences and robotics, but there is an increasing shortage of degreed professionals to satisfy an increasing demand.
Japan’s Softbank Group last week announced that it would purchase a 19.6% share of R&D Index member GM’s Cruise Holdings LLC, a driverless-car developer GM purchased in 2016 for about $1 billion. The $2.25 billion deal is a part of Softbank’s $92 billion Vision fund. The deal resulted in a 13% gain in GM stock.
In a separate announcement, R&D Index member Google/Alphabet’s self-driving subsidiary Waymo LLC said it would buy as many as 62,000 minivans from Fiat Chrysler as part of its plan to increase the number of its autonomous vehicles the company has on the road. Three new independent autonomous vehicle-focused test tracks are planned to open in 2018 in the Detroit area: Toyota Research Institute’s 60-acre site in Ottawa Lake, the Univ. of Michigan/Microsoft-sponsored American Mobility Center’s 335-acre site in Ypsilanti Township and FT Techno’s 950-acre site in Fowlerville.
The U.S. Justice Dept. approved R&D Index member’s Bayer AG acquisition of Monsanto. Bayer was required to sell off about $9 billion in assets (to competitor BASF SE) to preserve competition. Bayer has stated that it has now received almost all regulatory approvals to close the deal and expects finalization within a short period of time.
R&D Index Week Ending June 1, 2018
| Ticker | Exchange | 2017 R&D billions$ | 05/25/18 | 06/01/18 | 6/1/18 to 5/25/18 | 6/1/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 17,774 | 1,610.15 | 1,641.54 | 1.95% | 40.37% |
| Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,075.66 | 1,135.00 | 5.52% | 7.75% |
| Microsoft | MSFT | NASDAQ | 13,987 | 98.36 | 100.79 | 2.47% | 17.83% |
| Intel | INTC | NASDAQ | 13,499 | 55.44 | 57.08 | 2.96% | 23.66% |
| Apple | AAPL | NASDAQ | 11,506 | 188.58 | 190.24 | 0.88% | 12.42% |
| Volkswagen AG | VLKAY | OTC | 11,260 | 39.01 | 37.27 | -4.46% | -7.84% |
| Roche Pharm | RHHBY | OTC | 10,174 | 27.39 | 27.38 | -0.04% | -13.30% |
| Toyota | TM | NYSE | 9,170 | 129.96 | 131.31 | 1.04% | 3.25% |
| Johnson & Johnson | JNJ | NYSE | 9,060 | 121.47 | 121.26 | -0.17% | -13.21% |
| Novartis | NVS | NYSE | 7,870 | 76.10 | 75.60 | -0.66% | -9.96% |
| General Motors | GM | NYSE | 7,468 | 38.30 | 43.20 | 12.79% | 5.39% |
| Pfizer | PFE | NYSE | 7,288 | 35.68 | 36.25 | 1.60% | 0.08% |
| Bristol-Myers Squibb | BMY | NYSE | 6,942 | 52.77 | 53.13 | 0.68% | -13.30% |
| Cisco | CSCO | NASDAQ | 6,827 | 43.26 | 43.66 | 0.92% | 14.00% |
| Qualcomm | QCOM | NASDAQ | 6,723 | 59.96 | 58.61 | -2.25% | -8.45% |
| Oracle | ORCL | NYSE | 6,702 | 47.00 | 47.35 | 0.74% | 0.15% |
| Honda | HMC | NYSE | 6,519 | 32.04 | 32.01 | -0.09% | -6.07% |
| Astra Zeneca PLC | AZN | NYSE | 6,363 | 37.04 | 36.81 | -0.62% | 6.08% |
| Merck & Co. | MRK | NYSE | 5,759 | 59.09 | 60.56 | 2.49% | 7.62% |
| Daimler | DDAIY | OTC | 5,084 | 76.02 | 72.45 | -4.70% | -14.32% |
| Bayer AG | BAYN | OTC | 4,880 | 29.50 | 30.38 | 2.98% | -2.28% |
| Sanofi SA | SNY | NYSE | 4,755 | 38.28 | 38.79 | 1.33% | -9.79% |
| IBM | IBM | NYSE | 4,628 | 143.64 | 141.95 | -1.18% | -7.48% |
| GlaxoSmithKline | GSK | NYSE | 4,508 | 39.85 | 40.75 | 2.26% | 14.89% |
| Eli Lilly Co | LLY | NYSE | 4,489 | 82.77 | 84.85 | 2.51% | 0.46% |
| Total | 209,080 | 4,237.32 | 4,338.22 | 2.38% | 14.41% | ||
| Biopharmaceutical | 599.94 | 605.76 | 0.97% | -5.02% | |||
| Automotive | 315.33 | 316.24 | 0.29% | -3.36% | |||
| ICT | 1,711.90 | 1,774.68 | 3.67% | 7.08% | |||
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.
