The R&D World Index (RDWI) for the week ending June 30, 2023, closed at 2,891.86 for the 25 companies in the RDWI. The Index was up 1.16% (or 33.12 basis points). Seventeen of the 25 RDWI members gained value last week from 0.22% (Novartis) to 7.92% (Ford Motor Co.). Eight of the 25 RDWI members lost value last week from -0.60% (Roche Holdings AG) to -4.23% (Pfizer).
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Technology startup Anduril Industries, Costa Mesa, California, announced last week that it is acquiring solid-rocket engine manufacturer Andranos, West Lafayette, Indiana. Andranos is a spinoff from a Purdue University research program and participated in the university’s Innovates accelerator program in the Startup Foundry. Andranos rocket engines help fulfill a current shortage in rocket engines used in the Ukraine-Russia war due to relatively few suppliers. Aerojet Rocketdyne and Northrop Grumman are the two large suppliers for Department of Defense weapons contracts.
RDW Index member Ford Motor Co., Dearborn, Michigan, announced last week that it plans to lay off at least 1,000 salaried employees and contract workers in North America. These cuts are part of the company’s ongoing force reduction to reduce overall operating costs and transition to an electric vehicle (EV) basis. The current round of cuts will primarily affect workers in the automaker’s gas-engine and commercial vehicle divisions. This announcement comes ahead of scheduled negotiations with the United Auto Workers union over a new four-year contract for the company’s factory workers. The cuts will likely affect a small number of R&D employees, although no data was given on that aspect. Ford said the operating costs of manufacturing EVs might not equal that of manufacturing internal combustion vehicles until sometime after 2030.
EV developer and manufacturer Lucid Group, Newark, California, announced last week that sports car maker Aston Martin, Gaydon, U.K., will buy components for a future Aston Martin EV model which is currently scheduled to be released in 2025. Lucid will initially receive $142 million and a roughly 3.7% stake in the British company. Aston Martin currently has an automotive collaboration with Mercedes Benz but decided not to pursue that avenue for its EV plans. The Lucid Air EV has an efficient design and boasts a range of more than 500 miles, before recharging.
A report last week in the Wall Street Journal noted that the U.S. Department of Commerce (DOC) could move as early as July to stop the shipment of AI-based semiconductor chips made by Nvidia, Santa Clara, California, and other chip makers to customers in China without first obtaining a license. This action is part of the final rules codifying and expanding export control measures announced last October. DOC actions last year banned the most advanced Nvidia and Advanced Micro Devices (AMD, Santa Clara, California) AI chips from being exported to China. Nvidia responded to this ban by creating a lower-performance chip, but the current DOC actions would even ban shipments of this lower-power device. Even more actions are being contemplated by the DOC. Nvidia responded to the new DOC actions with comments that the actions could have a hefty long-term cost to the American chip industry.
The current drought in Midwest American farmland, including the Great Plains wheat fields, and the Corn Belt in the Upper Midwest could affect food inflation, according to farming advisor Consus, Grand Ledge, Michigan. Contracts for future deliveries are already up 8.8% from the start of June and oat prices are up 13% over the same period. Soybean oil prices have surged 28%. Corn edged 5.1% lower after recent rains and a better-than-expected federal estimate of planted acreage. Some growers, however, are now considering whether a weak harvest will be worth their effort.
U.S. defense agencies and the Federal Bureau of Investigation (FBI) have found that the Chinese spy balloon that floated over the U.S. earlier this year was loaded with commercially available American-made equipment that helped it collect photos, videos, and other information. The balloon was interspersed with more specialized Chinese sensors and other equipment to collect photos, video, and other information to transmit to China. The U.S. agencies conclude that the balloon was meant for spying, and not weather monitoring as Beijing sources have claimed.
The U.S. economy was found to be stronger than initially reported according to the federal reserve. Fed chair Jerome Powell reported last week that the U.S. had stronger than expected growth in the first quarter, tighter than expected labor markets, and higher than expected inflation. As a result, the Fed expects to impose two more interest rate increases in 2023. GDP grew at a 2% annual rate in 1Q, revised up from a previously reported 1.3% rate. Strong consumer spending was the driver for this upward revision. Broadly, the labor market remains resilient despite the Fed’s rate increase actions.
Analysts and journalists were surprised to hear that OpenAI CEO Sam Altman had visited 22 countries in his recent world tour. Altman noted that his company needs to make its products work better for non-English speakers and make it possible to determine if content is AI-generated. Altman discussed the threats and promises of AI to the world leaders that he met with. Altman noted that he’s trying to build relations first because he knows that regulations are coming.
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies), and ICT (9 companies) which invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spending in the world by government, industries, and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ, NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index
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