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The R&D Market Pulse Index for the week ending June 30, 2017 closed at 3,418.27 for the 25 companies in the R&D Index. The Index was down 3.59% (or 127.35 basis points) over the week ending June 23, 2017. Twenty-three R&D Index companies lost value last week from -0.18% (IBM) to -7.14% (Bayer AG). Two R&D Index companies, both automotive companies, gained value last week from 1.89% (Volkswagen) to 2.13% (General Motors).

The overall market was down for the week with positive gains only seen on June 28—losses or no gains were seen on the other four days. Declines in tech stocks (most of the R&D Index) drove the overall market down with concerns over European regulations seen as the biggest sell-off driver. R&D Index member Alphabet/Google was also fined a record $2.7 billion by EU regulators last Tuesday for favoring its own search engine in comparison shopping services. Analysts noted that the large size of many companies such as Google (Amazon, Apple, Microsoft, Intel and Facebook, for example) will invite continued scrutiny from regulators. Many of these companies have already seen large fines from regulators, particularly in Europe. Google stated that it is considering an appeal of the fines.

A major Ransomware cyberattack caused outages throughout Europe and the U.S. for most of the day on June 27 and affected several R&D Index members including Merck & Co.  The outbreak was possibly related to a software update from Kiev, Ukraine-based Intellekt Servis but researchers were unable to find evidence of a triggering mechanism. The attack triggered effects that were still being felt on Friday.

Index member GM noted last week that U.S. vehicle sales will be down to below 17-million units from its earlier forecast of 17.6-million units for 2017. Vehicle sales have been down every month this year from the sales in 2016. Manufacturers are stating that they are not planning on discounting strategies during the summer to spur sales, as they have in previous years.

Executives at BMW noted last week that it is scaling back on the number of car models and options it will offer in order to increase its R&D investments in developing electric and autonomous vehicles for the near-term future. BMW's CFO stated that it will need to increase its traditional level of R&D investments over the next two to three years for these efforts.  Complicating the financial situation for the car manufacturers is the fact that initial returns on electric/autonomous vehicles is lower than it is on the traditional gas/diesel powered cars, which benefit from a long history of well-developed technologies.

      R&D Index Week Ending June 30, 2017      
    Ticker Exchange 2017 R&D billions$ 06/23/17 06/30/17 6/30/17 to 6/23/17 6/30/17 to 1/1/17
1 Amazon AMZN NASDAQ 17,774 1,003.74 968.00 -3.56% 29.09%
2 Alphabet/Google GOOGL NASDAQ 15,845 986.09 929.68 -5.72% 17.32%
3 Microsoft MSFT NASDAQ 13,987 71.21 68.93 -3.20% 10.93%
4 Intel INTC NASDAQ 13,499 34.19 33.74 -1.32% -6.98%
5 Apple AAPL NASDAQ 11,506 146.28 144.02 -1.54% 24.35%
6 Volkswagen AG VLKAY OTC 11,260 30.63 31.12 1.89% 8.51%
7 Roche Pharm RHHBY OTC 10,174 32.76 31.80 -2.93% 11.46%
8 Toyota TM NYSE 9,170 105.24 105.02 -0.21% -10.39%
9 Johnson & Johnson JNJ NYSE 9,060 136.43 132.29 -3.03% 14.83%
10 Novartis NVS NYSE 7,870 86.34 83.47 -3.32% 14.59%
11 General Motors GM NYSE 7,468 34.20 34.93 2.13% 0.26%
12 Pfizer PFE NYSE 7,288 34.17 33.59 -1.70% 3.42%
13 Bristol-Myers Squibb BMY NYSE 6,942 56.64 55.72 -1.62% -4.65%
14 Cisco CSCO NASDAQ 6,827 32.10 31.30 -2.49% 3.57%
15 Qualcomm QCOM NASDAQ 6,723 56.91 55.22 -2.97% -15.31%
16 Oracle ORCL NYSE 6,702 50.95 50.14 -1.59% 30.40%
17 Honda HMC NYSE 6,519 27.65 27.39 -0.95% -6.17%
18 Astra Zeneca PLC AZN NYSE 6,363 35.07 34.09 -2.79% 24.78%
19 Merck & Co. MRK NYSE 5,759 66.16 64.09 -3.13% 8.87%
20 Daimler DDAIY OTC 5,084 65.34 63.37 -3.02% -10.39%
21 Bayer AG BAYN XETRA 4,880 121.90 113.20 -7.14% 14.19%
22 Sanofi SA SNY NYSE 4,755 49.33 47.91 -2.88% 18.47%
23 IBM IBM NYSE 4,628 154.11 153.83 -0.18% -7.33%
24 GlaxoSmithKline GSK NYSE 4,508 44.29 43.12 -2.64% 11.97%
25 Eli Lilly Co LLY NYSE 4,489 83.89 82.30 -1.90% 11.90%
  Total     209,080 3,545.62 3,418.27 -3.59% 14.62%
                 
      Biopharmaceutical 746.98 721.58 -3.40% 11.82%
      Automotive 263.06 261.83 -0.47% -6.70%
      ICT   1,531.84 1,466.86 -4.24% 12.27%

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.R&D Market Pulse 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.

 

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