The R&D World Index (RDWI) for the week ending March 18, 2022, closed at 5,259.30 for the 25 companies in the RDWI. The Index was up 6.06% (or 300.41 basis points) from the week ending March 11, 2022. Each stock of all 25 RDWI members gained value from 1.09% (Merck & Co.) to 24.90% (Alibaba).
As expected, the U.S. Federal Reserve boosted short-term interest rates at its March meeting last week by 0.25% to a range of 0.25% to 0.50%. In its comments, the Fed stated that if inflation rates do not subside that they will likely increase rates at quarter-point (or more) at each of their remaining six meetings this year. By the end of 2023, analysts expect the interest rates to reach 2.75%, the highest point since March 2008. The Fed expects inflation to moderate, forecasting an elevated 4.3% rate by the end of 2022. Economic growth has been downgraded to 2.8% for 2022, down from an estimate of 4.0% in December. The Fed’s worry is that if inflation continues, especially in light of the Russia-Ukraine war, that they may have to raise interest rates higher than they now expect, which could potentially cause a recession. Many economists believe that interest rate increases are long overdue and that half-point increases are likely to be put in place by this summer.
The Organization of the Petroleum Exporting Countries (OPEC, Vienna) and the Organization for Economic Cooperation and Development (OECD, Paris) came out with mostly similar reports last week, stating that Russia’s invasion of Ukraine will slow overall global growth. OPEC said that the conflict was driving up commodity prices and exacerbating already elevated global inflation. OPEC said the situation was still too fluid to make accurate forecasts and will keep its growth forecasts at its February levels. The war will, however, have an impact on future demand for oil products. The OECD report stated that the global community will be affected by higher energy and food prices, with disruptions to trade and overall confidence weakening global growth. OECD forecast global growth to be 1.1 percentage points lower, with inflation about 2.5 points higher than if the invasion had not taken place. Economists also predict that the war will have a slowing effect on global growth powerhouse, China, potentially slowing their economy by up to 1% due to slower demand and increased supply constraints.
RDW Index member Pfizer, New York City, and Moderna, Cambridge, Massachusetts, — both approved COVID-19 vaccine developers and suppliers — both asked for Food and Drug Administration (FDA) approval for a second booster shot last week. A report in the New England Journal of Medicine stated that giving out this fourth vaccine dose increased levels of neutralizing antibodies against the virus. There is limited data on the effectiveness of this fourth vaccine dose and researchers are divided on its potential need.
Medical device developer and manufacturer Boston Scientific, Marlborough, Massachusetts, announced last week that it had opened its second R&D center in India, in the western city of Pune. The new center is 45,000-ft2 and will employ 170 researchers, more than doubling the number of R&D employees the company has in India. Their first Indian R&D center opened in Gurgaon in 2014.
Taiwan announced last week that it has formed a national group for R&D of quantum technologies with focuses on quantum device communications. The group aims at R&D across domains and organizations with applications in wafer foundries, ICs, IC packaging/testing, photonics, telecom, national defense, logistics, and pharmaceuticals. The group has a budget of $280 million in 17 research teams with 72 project leaders.
Electronic materials specialists, Linx Consulting, Mendon, Massachusetts, reported last week that most semiconductor chip makers had stockpiled or second-sourced critical manufacturing materials, such as neon gas and palladium before the Russian invasion of Ukraine. Russia and Ukraine were primary sources of these materials which are now in limited availability from those countries. Taiwan Semiconductor Manufacturing Co. has assured customers that it has alternate suppliers, while Germany’s Infineon Technologies AG said it did not expect a production impact, saying it had supply options and previously increased its inventory of those critical materials.
The International Food Policy Research Institute, Washington, D.C., reported last week that international food markets will probably face shortages starting this year due to the Russia-Ukraine conflict. Together these countries supply almost a third of the world’s wheat, a quarter of its barley and nearly three-quarters of its sunflower oil. Commercial activity in Ukraine’s ports has stopped since the invasion and it will be hard for farmers to harvest crops this summer and export grains if the fighting isolates them from the ports. Ukrainian farmers also may face shortages of fuel which may be need for military use. Russian farmers do not face the same hurdles, but sanctions will likely affect demand for their products.
Porsche AG, Stuttgart, Germany and RDW Index member Apple, Cupertino, California, held talks in November concerning joint development projects according to a talk given by Porsche’s chief executive last week. The rare admission by an automaker’s top executive that talks were underway with Apple is the latest twist in Apple’s long-term flirtation (since 2014) with the automotive industry. Porsche’s parent, RDW Index member Volkswagen, Wolfsburg, Germany, has stated that it plans to take Porsche public later this year.
Walmart’s, Bentonville, Arkansas, technology organization, Walmart Global Tech, announced last week that it plans to hire 5,000 technology associates in 2022 and open new hubs in Toronto, and Atlanta, as part of its expansion plans. Openings for these positions include roles in cybersecurity, software architecture development, software engineering, data science, data engineering, technical program management, and product management. The Walmart Global Tech team grew 26% in 2021 and now has more than 20,000 employees. Technologies in use in the group include augmented reality, artificial intelligence, and autonomous delivery methodologies. Before the new addition, Walmart Global Tech already had 15 hubs, including in Silicon Valley, California, and Bangalore, India.
About the R&D World Index
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 2019 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) who invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of. Multri all the R&D spent 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.