The R&D Index for the week ending October 12, 2018 closed at 4,505.56 for the 25 companies in the R&D Index. The Index was down -4.48% (or -211.24 basis points) from the week ending October 5, 2018. The stock of only one R&D Index company gained value last week—Bayer AG gained 2.93%. The stock of twenty-four R&D Index companies lost value last week from -0.97% (Apple Computer) to -9.72% (Qualcomm).
Fear over the effects of rising interest rates caused the stock market to have its worst week in six months. Supporting the drop in the stock market has been a rise in the yields of U.S. Treasury bonds which are now approaching 3% on two-year bonds. Despite last week’s stock market sell-off and comments by President Trump against interest rate hikes, analysts still expect the Fed to once again raise short-term interest rates at its December meeting to a range between 2.25% and 2.50% to help keep inflation under control.
The International Monetary Fund (IMF) released its October 2018 Economic Forecast last week. The forecast stated that U.S. growth will peak at 2.9% in 2018, drop to 2.5% in 2019 and further drop to 1.8% in 2020 as fiscal stimulus measures put in place several years ago unwind. China’s economic growth is similarly forecast to slow to 6.6% in 2018, 6.2% in 2019 and 5.6% in 2020. India’s growth is forecast to continue strong growth from 6.7% in 2017 to 7.3% in 2018 and 7.4% in 2019.
Germany’s Fraunhofer Institute and RWTH Aachen Campus announced last week that they would team with the Hong Kong Productivity Council to create The Hatch in Hong Kong and another center in the same area called The Loop, to develop new industrial technologies and digital manufacturing systems for China’s re-industrialization programs.
Paris, France-based SUEZ announced last week the opening of a new large research lab outside Houston, Texas, to support the local oil and gas industry, including water analytical testing and fuel oil analyses.
R&D Index member Apple last week announced that it is buying part of European chipmaker Dialog Semiconductor in an effort to bring more of its semiconductor design in-house. The deal includes $300 million to license Dialog’s power management technologies, hire about 300 engineers and take control of some of Dialog’s assets. Another $300 million was committed to purchasing products from Dialog over the next three years. Last year, analysts stated that Apple was moving away from Dialog and looking to design its own power management systems.
R&D Index Week Ending October 12, 2018
| Ticker | Exchange | 2018 R&D millions U.S. $ | 10/05/18 | 10/12/18 | 10/12/18 to 10/05/18 | 10/12/18 to 12/29/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 26,750 | 1,889.65 | 1,788.61 | -5.35% | 52.94% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,167.83 | 1,120.54 | -4.05% | 6.37% |
| 3 | Apple | AAPL | NASDAQ | 14,037 | 224.29 | 222.11 | -0.97% | 31.25% |
| 4 | Intel | INTC | NASDAQ | 13,702 | 47.03 | 44.88 | -4.57% | -2.77% |
| 5 | Microsoft | MSFT | NASDAQ | 13,558 | 112.13 | 109.57 | -2.28% | 28.09% |
| 6 | Roche Pharm | RHHBY | OTC | 12,284 | 30.85 | 29.70 | -3.73% | -5.95% |
| 7 | Johnson & Johnson | JNJ | NYSE | 11,493 | 139.10 | 133.87 | -3.76% | -4.19% |
| 8 | Merck & Co. | MRK | NYSE | 11,323 | 71.03 | 69.81 | -1.72% | 24.06% |
| 9 | Volkswagen AG | VWAGY | OTC | 10,915 | 16.94 | 15.95 | -5.84% | -60.56% |
| 10 | Toyota | TM | NYSE | 10,848 | 121.50 | 116.76 | -3.90% | -8.19% |
| 11 | Novartis | NVS | NYSE | 8,934 | 85.51 | 82.78 | -3.19% | -1.41% |
| 12 | Honda | HMC | NYSE | 8,180 | 28.85 | 27.21 | -5.86% | -20.16% |
| 13 | Pfizer | PFE | NYSE | 7,942 | 44.91 | 43.78 | -2.52% | 20.87% |
| 14 | Daimler | DDAIY | OTC | 7,615 | 63.86 | 61.47 | -3.74% | -27.31% |
| 15 | General Motors | GM | NYSE | 7,278 | 34.12 | 31.79 | -6.83% | -22.44% |
| 16 | Oracle | ORCL | NYSE | 7,001 | 49.35 | 47.38 | -3.99% | 0.21% |
| 17 | Bristol-Myers Squibb | BMY | NYSE | 6,981 | 62.41 | 57.51 | -7.85% | -6.15% |
| 18 | Eli Lilly Co | LLY | NYSE | 6,769 | 115.02 | 110.48 | -3.95% | 30.81% |
| 19 | GlaxoSmithKline | GSK | NYSE | 6,394 | 39.81 | 38.31 | -3.77% | 8.01% |
| 20 | Cisco | CSCO | NASDAQ | 6,009 | 48.13 | 45.71 | -5.03% | 19.35% |
| 21 | IBM | IBM | NYSE | 5,842 | 149.03 | 140.85 | -5.49% | -8.19% |
| 22 | Bayer AG | BAYN | OTC | 5,743 | 21.53 | 22.16 | 2.93% | -28.72% |
| 23 | Astra Zeneca PLC | AZN | NYSE | 5,483 | 39.06 | 37.15 | -4.89% | 7.06% |
| 24 | Qualcomm | QCOM | NASDAQ | 5,183 | 71.21 | 64.29 | -9.72% | -0.42% |
| 25 | Sanofi SA | SNY | NYSE | 4,694 | 43.65 | 42.89 | -1.74% | -0.26% |
| Total | 243,754 | 4,716.80 | 4,505.56 | -4.65% | 18.82% | |||
| Biopharmaceutical | 692.88 | 668.44 | -3.53% | 4.81% | ||||
| Automotive | 265.27 | 253.18 | -4.56% | -22.63% | ||||
| ICT | 1,869.00 | 1,795.33 | -3.94% | 8.33% | ||||
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 2018 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 2018 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.
