The R&D Index for the week ending May 25, 2018 closed at 4,237.32 for the 25 companies in the R&D Index. The Index was up 0.83% (or 34.96 basis points) from the week ending May 18, 2018. Thirteen R&D Index companies gained value last week from 0.11% (Pfizer and Bristol Myers Squibb) to 4.26% (Qualcomm). Twelve R&D Index companies lost value last week from -0.08% (Merck & Co.) to -4.47% (Toyota).
R&D Index member Amazon noted that it completed on-site tours of all 20 finalist cities in May for its second headquarters location and that selection will be announced soon. Analysts have noted that the selection is likely to be in northern Virginia to give Amazon access to the Washington DC area. Analysts also commented that R&D Index member Apple is also looking to create a second headquarters location which currently is expected to be in either the Raleigh-Durham, NC area or northern Virginia, similar to Amazon. Apple is being secretive about its selection process other than it will announce its selection by the end of 2018.
Tesla Motors’ CEO Elon Musk may be looking at getting out of the mass market auto business with comments he made last week stating that his low-cost Model 3 ($35,000) would cause the company to “lose money and die.” His comments have concerned Tesla’s investors who have given him $50 billion to transform the auto industry.
Swiss-based food maker Nestle last week noted that it plans to combine its scientific research operations into a single unit in an attempt to accelerate the development of new products to effectively compete against its growing list of smaller rivals. Nestle plans to merge its Nestle Research Center and Nestle Institute of Health Sciences into one organization called Nestle Research based in Lausanne Switzerland. The change will not involve job cuts or the closure of any facilities, but is expected to speed up their overall development times.
Fed to Raise Rates
The minutes of the Fed’s May 1-2 meeting released last Wednesday revealed that the Fed members believe they are likely to raise the short-term interest rates at their June 12-13 meeting to a range between 1.75% and 2.00%, a quarter point higher than the current rates. The Fed also stated that they would accept an inflation rate slightly above their target rate of 2.0%
| R&D Index Week Ending May 25, 2018 |
| Ticker | Exchange | 2017 R&D billions$ | 05/18/18 | 05/25/18 | 5/25/18 to 5/18/18 | 5/25/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 17,774 | 1,574.37 | 1,610.15 | 2.27% | 37.68% |
| Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,069.64 | 1,075.66 | 0.56% | 2.11% |
| Microsoft | MSFT | NASDAQ | 13,987 | 96.36 | 98.36 | 2.08% | 14.99% |
| Intel | INTC | NASDAQ | 13,499 | 53.50 | 55.44 | 3.63% | 20.10% |
| Apple | AAPL | NASDAQ | 11,506 | 186.31 | 188.58 | 1.22% | 11.43% |
| Volkswagen AG | VLKAY | OTC | 11,260 | 40.19 | 39.01 | -2.94% | -3.54% |
| Roche Pharm | RHHBY | OTC | 10,174 | 27.93 | 27.39 | -1.93% | -13.27% |
| Toyota | TM | NYSE | 9,170 | 136.04 | 129.96 | -4.47% | 2.19% |
| Johnson & Johnson | JNJ | NYSE | 9,060 | 124.24 | 121.47 | -2.23% | -13.06% |
| Novartis | NVS | NYSE | 7,870 | 77.06 | 76.10 | -1.25% | -9.36% |
| General Motors | GM | NYSE | 7,468 | 37.79 | 38.30 | 1.35% | -6.56% |
| Pfizer | PFE | NYSE | 7,288 | 35.64 | 35.68 | 0.11% | -1.49% |
| Bristol-Myers Squibb | BMY | NYSE | 6,942 | 52.71 | 52.77 | 0.11% | -13.89% |
| Cisco | CSCO | NASDAQ | 6,827 | 43.21 | 43.26 | 0.12% | 12.95% |
| Qualcomm | QCOM | NASDAQ | 6,723 | 57.51 | 59.96 | 4.26% | -6.34% |
| Oracle | ORCL | NYSE | 6,702 | 46.32 | 47.00 | 1.47% | -0.59% |
| Honda | HMC | NYSE | 6,519 | 32.98 | 32.04 | -2.85% | -5.99% |
| Astra Zeneca PLC | AZN | NYSE | 6,363 | 36.33 | 37.04 | 1.95% | 6.74% |
| Merck & Co. | MRK | NYSE | 5,759 | 59.14 | 59.09 | -0.08% | 5.01% |
| Daimler | DDAIY | OTC | 5,084 | 79.26 | 76.02 | -4.09% | -10.10% |
| Bayer AG | BAYN | OTC | 4,880 | 30.77 | 29.50 | -4.13% | -5.11% |
| Sanofi SA | SNY | NYSE | 4,755 | 38.88 | 38.28 | -1.54% | -10.98% |
| IBM | IBM | NYSE | 4,628 | 144.08 | 143.64 | -0.31% | -6.37% |
| GlaxoSmithKline | GSK | NYSE | 4,508 | 40.03 | 39.85 | -0.45% | 12.35% |
| Eli Lilly Co | LLY | NYSE | 4,489 | 82.07 | 82.77 | 0.85% | -2.00% |
| Total | 209,080 | 4,202.36 | 4,237.32 | 0.83% | 11.75% | ||
| Biopharmaceutical | 604.80 | 599.94 | -0.80% | -5.93% | |||
| Automotive | 326.26 | 315.33 | -3.35% | -3.64% | |||
| ICT | 1,696.93 | 1,711.90 | 0.88% | 3.29% | |||
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.
