The R&D Index: Market Watch for the week ending October 27, 2017 closed at 3,743.93 for the 25 companies in the R&D Index. The Index was up 3.52% (or 127.22 basis points) over the week ending October 20, 2017. Twelve R&D Index companies gained value last week from 0.42% (Toyota) to 12.01% (Amazon). Thirteen R&D Index companies lost value last week from -0.44% (Johnson & Johnson) to -11.29% (GlaxoSmithKline). All eleven bio-pharmaceutical members of the R&D Index lost value last week for an average of -4.66%. The reasons for losses in this R&D Index sector were mixed with no over-riding factors.
The U.S. economy grew at an annualized 3.1% in the third quarter (exceeding analysts’ expectations of 2.7% growth), according to a report released by the Commerce Dept. on Friday. This followed 3.1% growth in Q2, but only 1.2% (revised) in 1Q. Evaluating Q3 spending was slightly mixed as consumers in the hurricane ravaged areas bought new cars to replace their flood-damaged vehicles, thereby artificially raising the GDP growth figures.
R&D Index members Amazon, Google, Microsoft and Intel posted large gains on Friday, boosting the Nasdaq Composite up 2.2% to a record high in its biggest one-day gain since August 2015. The gains in these four stocks added a collective $146 billion in market value to these companies – $139 billion in just 30 minutes of trading. The strong market-leading cloud businesses of Amazon, Google and Microsoft, while still a relatively small part of their overall portfolios, has given investors reasons for believing that their current growth values will continue.
President Trump commented last Friday that he would announce his choice for the next Federal Reserve Chair in the next week. Choices being considered include Fed Governor Jerome Powell, Stanford economist John Taylor and current Fed chair Janet Yellen.
President Trump begins his five-nation, 11-day Asian tour this Friday, November 3. Countries he is expected to visit include China, Japan, South Korea, the Philippines and Vietnam. Trump is expected to pressure China on North Korea during his visit.
Boeing announced last Wednesday that increased demand for its single-aisle 737 has raised its production plans beyond the 35% increase previously envisioned by the end of the decade. The company plans to increase production from the current 47 to 52 planes/month in 2018 and more than 57 planes/month in 2019. Boeing is expected to spend $4.96 billion in R&D in 2017 and $5.35 billion in 2018 – a 7.7% annual increase.
R&D Index Week Ending October 27, 2017
|Ticker||Exchange||2017 R&D billions$||10/20/17||10/27/17||10/27/17 to 10/20/17||10/27/17 to 1/1/17|
|9||Johnson & Johnson||JNJ||NYSE||9,060||142.40||141.78||-0.44%||23.06%|
|18||Astra Zeneca PLC||AZN||NYSE||6,363||34.62||33.49||-3.26%||22.58%|
|19||Merck & Co.||MRK||NYSE||5,759||63.88||58.24||-8.83%||-1.07%|
|25||Eli Lilly Co||LLY||NYSE||4,489||87.23||83.86||-3.86%||14.02%|
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.