The R&D Index for the holiday-shortened week ending February 23, 2018 closed at 4,228.11 for the 25 companies in the R&D Index. The Index was up 1.90 percent (or 78.99 basis points) from the week ending February 16, 2018. Nine R&D Index companies posted a gain for the week from 0.24 percent (Astra Zeneca) to 4.76 percent (Intel). Fifteen R&D Index companies posted losses for the week from -0.28 percent (Eli Lilly) to -3.67 percent (Volkswagen). Pfizer ($36.26) was unchanged for the week. It should be noted that R&D Index member Amazon (+3.54 percent for the week) closed at 100.03 percent of its January 1, 2017 close—doubling its value in less than 14 months.
It was announced last week that CEO Li Shufu of China’s automotive Geely Holding Group has acquired 9.7 percent of R&D Index member Daimler. The move likely will place Shufu on Daimler’s board and will give Geely access to Daimler’s advanced technology in electric and autonomous vehicles. Geely purchased Volvo in 2010 with heavy R&D investments in the company since then. The upscale Volvo has seen increased sales since the Geely purchased and announced in 2017 that it would introduce electric or hybrid-electric engines in all of its models by 2019. Geely operates its China Euro Vehicle Technology R&D center in Gothenburg, Germany.
In its semiannual report to the Congress on Friday, the Federal Reserve noted that it is not convinced that the stock market volatility seen over the past month will change their plans for three interest rate hikes this year. The Fed still sees equity prices as elevated and that “overall vulnerabilities in the U.S. financial system remain moderate on balance.” The Fed noted that stock prices are higher than would be expected given the current level of longer-term Treasury yields. Wage gains are viewed as moderate that are held down by the weak pace of productivity growth seen over the past several years. In the notes to their January 2018 meeting, they also stated that they see inflation returning to their 2 percent target over the coming year after years of consistently lagging behind.
Trump’s imposition of a 30 percent tariff on imported solar panels is expected to slow its (already slowing) market growth according to analysts. However, local and state governments’ requirement for utilities to increase renewable energy sources will continue to create a baseline market for solar power, especially for large utility scale solar projects. The first year tariffs are 30 percent and decline to 15 percent in the fourth year. Technological improvements and cost savings in other areas are expected to help the solar industry offset some of the tariff increases, according to the analysts.
| R&D Index Week Ending February 23, 2018 |
| Ticker | Exchange | 2017 R&D billions$ | 02/16/18 | 02/23/18 | 2/23/18 to 2/16/18 | 2/23/18 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 1,448.69 | 1,500.00 | 3.54% | 100.03% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,095.50 | 1,128.09 | 2.97% | 42.35% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 92.00 | 94.06 | 2.24% | 51.37% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 45.56 | 47.73 | 4.76% | 31.60% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 172.43 | 175.50 | 1.78% | 51.53% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 42.54 | 40.98 | -3.67% | 42.89% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 30.30 | 29.75 | -1.82% | -0.10% |
| 8 | Toyota | TM | NYSE | 9,170 | 136.20 | 137.03 | 0.61% | 16.92% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 133.15 | 132.02 | -0.85% | 14.59% |
| 10 | Novartis | NVS | NYSE | 7,870 | 86.91 | 85.33 | -1.82% | 17.15% |
| 11 | General Motors | GM | NYSE | 7,468 | 41.09 | 40.91 | -0.44% | 17.42% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 36.26 | 36.26 | 0.00% | 11.64% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 68.96 | 67.95 | -1.46% | 16.27% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 44.33 | 44.00 | -0.74% | 45.60% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 64.85 | 63.32 | -2.36% | -2.88% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 50.71 | 50.50 | -0.41% | 31.34% |
| 17 | Honda | HMC | NYSE | 6,519 | 35.64 | 36.18 | 1.52% | 23.95% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 33.93 | 34.01 | 0.24% | 24.49% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 56.29 | 54.87 | -2.52% | -6.79% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 90.29 | 88.06 | -2.47% | 24.52% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 30.73 | 30.32 | -1.33% | 12.17% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 39.91 | 40.13 | 0.55% | -0.77% |
| 23 | IBM | IBM | NYSE | 4,628 | 156.18 | 155.52 | -0.42% | -6.31% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 37.70 | 36.84 | -2.28% | -4.34% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 78.97 | 78.75 | -0.28% | 7.07% |
| Total | 209,080 | 4,149.12 | 4,228.11 | 1.90% | 45.22% | |||
| Biopharmaceutical | 633.11 | 626.23 | -1.09% | 9.01% | ||||
| Automotive | 345.76 | 343.16 | -0.75% | 22.28% | ||||
| ICT | 1,721.56 | 1,758.72 | 2.16% |
34.61% |
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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.
