The R&D Market Pulse Index for the week ending September 15, 2017 closed at 3,487.85 for the 25 companies included. The Index was up 1.08% (or 37.30 basis points) over the week ending September 8, 2017. Nineteen R&D Index companies gained value last week from 0.47% (GlaxoSmithKline) to 5.14 percent (Qualcomm and Intel). Six R&D Index companies lost value last week from -0.06 percent (Novartis) to -5.51 percent (Oracle).
R&D member Oracle had its worst (market) day in four years last week following the release of guidance for the second quarter of its 2018 fiscal year (which runs from September 1 to November 30). Despite 2 percent to 4 percent revenue growth, these numbers fell below analysts’ expectations. Oracle stock is also up nearly 27 percent since January. Oracle is expected to spend $6.94 billion on R&D in 2018, a 5 percent increase over what it expects to spend in 2017.
The Labor Dept. last week reported that the U.S. consumer price index (CPI) grew by 0.4% in August over July, the largest monthly increase since January. Much of this increase could be attributed to energy price increases caused by the closure of Houston refineries from Hurricane Harvey. However, excluding food and energy, the CPI still increased by 0.2 percent, the largest increase of this item since February. Since June, core prices have risen at an annual rate of 1.9%, which eases concerns by the Federal Reserve for another short-term interest rate hike this year just prior to the Fed’s next regular meeting on Tuesday-Wednesday (Sept. 19-20). The 1.9 percent inflation rate is still below January’s pace of 2.5v. If the current inflation trends continue, the Fed is likely to increase rates by another 0.25 percent at its December meeting. Unemployment for August was reported at 4.4 percent, still below the Fed’s long-term projections.
A group including R&D index member Apple and Dell Technologies are the lead bidders to acquire Toshiba Corp.’s memory chip business. Toshiba stated last week that it has signed a nonbinding agreement with the leader of the group, private-equity firm Bain Capital, and intends to finalize a deal by the end of September for about $19 billion. Toshiba is eager to finalize the deal following huge losses at its U.S. nuclear unit, Westinghouse Electric Co., which filed for bankruptcy earlier this year. Toshiba would like to use the proceeds from its memory deal to return its shareholder equity back into positive territory by the end of its fiscal year in March 2018. The deal would also help support its internal R&D efforts which were estimated to drop by more than 15 percent in 2018 to approximately $1.85 billion.
| R&D Market Pulse Index Week Ending September 15, 2017 |
| Ticker | Exchange | 2017 R&D billions$ | 09/08/17 | 09/15/17 | 9/15/17 to 9/8/17 | 9/15/17 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 965.90 | 986.79 | 2.16% | 31.59% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 941.41 | 935.29 | -0.65% | 18.02% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 73.98 | 75.31 | 1.80% | 21.29% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 35.19 | 37.00 | 5.14% | 2.01% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 158.63 | 159.88 | 0.79% | 38.04% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 32.79 | 33.59 | 2.44% | 17.12% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 31.49 | 31.72 | 0.73% | 11.18% |
| 8 | Toyota | TM | NYSE | 9,170 | 114.97 | 117.69 | 2.37% | 0.42% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 130.98 | 134.45 | 2.65% | 16.70% |
| 10 | Novartis | NVS | NYSE | 7,870 | 85.63 | 85.58 | -0.06% | 17.49% |
| 11 | General Motors | GM | NYSE | 7,468 | 37.00 | 38.88 | 5.08% | 11.60% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 34.01 | 35.36 | 3.97% | 8.87% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 62.62 | 62.48 | -0.22% | 6.91% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 31.48 | 32.44 | 3.05% | 7.35% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 49.64 | 52.19 | 5.14% | -19.95% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 51.58 | 48.74 | -5.51% | 26.76% |
| 17 | Honda | HMC | NYSE | 6,519 | 28.46 | 29.34 | 3.09% | 0.51% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 32.25 | 32.53 | 0.87% | 19.07% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 64.27 | 66.16 | 2.94% | 12.38% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 64.83 | 66.25 | 2.19% | -6.32% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 108.65 | 110.25 | 1.47% | 11.22% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 49.37 | 48.43 | -1.90% | 19.76% |
| 23 | IBM | IBM | NYSE | 4,628 | 142.45 | 144.82 | 1.66% | -12.75% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 40.05 | 40.24 | 0.47% | 4.49% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 82.92 | 82.44 | -0.58% | 12.09% |
| Total | 209,080 | 3,450.55 | 3,487.85 | 1.08% | 16.95% | |||
| Biopharmaceutical | 722.24 | 729.64 | 1.02% | 13.07% | ||||
| Automotive | 278.05 | 285.75 | 2.77% | 1.82% | ||||
| ICT | 1,484.36 | 1,485.67 | 0.09% | 13.71% | ||||
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.
