The R&D Index for the week ending January 18, 2019 closed at 4,332.53 for the 25 companies in the R&D Index. The Index was up 2.82% (or 118.75 basis points) from the week ending January 11, 2019. The stock of 20 R&D Index members gained value from 0.22% (Toyota) to 4.78% (Microsoft). The stock of five R&D Index members lost value from -0.81% (GlaxoSmithKline) to -3.79% (Qualcomm).
A relaxation of trade tensions, strong corporate earnings reports and positive Fed news have all contributed to stock market gains of more than 10% over the past four weeks, its strongest in more than seven years. The continued U.S. government shutdown, however, is likely to hit the economy but its current effects are muted since most government economic reports are not occurring due to the shutdown itself. The effects of furloughed workers, affected contractors and reduced government spending are all being postponed. However, even White House Council of Economic Advisors Chairman Kevin Hassett stated that the shutdown is shaving 0.2 percentage points off of the U.S. gross domestic product (GDP) every two weeks. The shutdown had been in place for more than four weeks. According to our 2019 Global R&D Funding Forecast this could reduce U.S. total R&D investment by more than $10 billion.
Pharma’s focus on artificial intelligence reported in previous R&D Index news items continued last week as R&D Index member Novartis announced a partnership with Oxford University to examine how AI can be used to predict how patients will respond to new and existing treatments for multiple sclerosis (MS) and psoriasis.
R&D Index member Volkswagen announced last week that it was investing more than $300 million in R&D as part of its India 2.0 project. VW’s R&D aim is to achieve 95% localization of the vehicles supplied in the Indian market. As part of this investment, VW opened a new technology center in India.
In an interview with Bloomberg News, R&D Index member Cisco’s CEO Chuck Robbins cautioned U.S. officials that increasing tariffs on Chinese goods will come at the expense of reduced R&D investments since the affected companies (including Cisco, HP, Dell and Juniper) will absorb the costs of higher tariffs and cut back on R&D.
Huawei Canada announced last week that up to half of its employees will get some of the $2 billion that its Chinese parent company plans to spend over the next five years on R&D to ensure that its equipment was secure. Based on urging from the U.S., Canadian officials arrested Huawei’s chief financial officer last December on charges of violating banned technology transfer to Iran.
| R&D Index Week Ending January 18, 2019 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 01/11/19 | 01/18/19 | 1/18/19 to 1/11/19 | 1/18/19 to 12/31/18 | ||
| 1 | Amazon | AMZN | NASDAQ | 26,750 | 1,640.56 | 1,696.20 | 3.39% | 12.93% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,064.47 | 1,107.30 | 4.02% | 5.97% |
| 3 | Apple | AAPL | NASDAQ | 14,037 | 152.29 | 156.82 | 2.97% | -0.58% |
| 4 | Intel | INTC | NASDAQ | 13,702 | 48.93 | 49.19 | 0.53% | 4.82% |
| 5 | Microsoft | MSFT | NASDAQ | 13,558 | 102.80 | 107.71 | 4.78% | 6.04% |
| 6 | Roche Pharm | RHHBY | OTC | 12,284 | 32.41 | 32.61 | 0.62% | 4.92% |
| 7 | Johnson & Johnson | JNJ | NYSE | 11,493 | 129.75 | 130.69 | 0.72% | 1.26% |
| 8 | Merck & Co. | MRK | NYSE | 11,323 | 74.90 | 75.87 | 1.30% | -0.80% |
| 9 | Volkswagen AG | VWAGY | OTC | 10,915 | 16.66 | 16.72 | 0.36% | 7.18% |
| 10 | Toyota | TM | NYSE | 10,848 | 125.07 | 125.35 | 0.22% | 7.99% |
| 11 | Novartis | NVS | NYSE | 8,934 | 87.77 | 88.99 | 1.39% | 3.71% |
| 12 | Honda | HMC | NYSE | 8,180 | 29.27 | 29.76 | 1.67% | 12.51% |
| 13 | Pfizer | PFE | NYSE | 7,942 | 42.88 | 42.53 | -0.82% | -2.57% |
| 14 | Daimler | DDAIY | OTC | 7,615 | 56.20 | 57.95 | 3.11% | 9.82% |
| 15 | General Motors | GM | NYSE | 7,278 | 37.18 | 38.61 | 3.85% | 15.43% |
| 16 | Oracle | ORCL | NYSE | 7,001 | 48.29 | 49.27 | 2.03% | 9.12% |
| 17 | Bristol-Myers Squibb | BMY | NYSE | 6,981 | 47.99 | 50.12 | 4.44% | -3.58% |
| 18 | Eli Lilly Co | LLY | NYSE | 6,769 | 116.18 | 116.59 | 0.35% | 0.75% |
| 19 | GlaxoSmithKline | GSK | NYSE | 6,394 | 39.38 | 39.06 | -0.81% | 2.22% |
| 20 | Cisco | CSCO | NASDAQ | 6,009 | 43.49 | 45.03 | 3.54% | 3.92% |
| 21 | IBM | IBM | NYSE | 5,842 | 121.46 | 123.82 | 1.94% | 8.93% |
| 22 | Bayer AG | BAYN | OTC | 5,743 | 18.96 | 19.04 | 0.42% | 8.37% |
| 23 | Astra Zeneca PLC | AZN | NYSE | 5,483 | 36.95 | 36.55 | -1.08% | -3.77% |
| 24 | Qualcomm | QCOM | NASDAQ | 5,183 | 57.50 | 55.27 | -3.79% | -2.88% |
| 25 | Sanofi SA | SNY | NYSE | 4,694 | 42.44 | 41.48 | -2.26% | -4.45% |
| Total | 243,754 | 4,213.78 | 4,332.53 | 2.82% | 7.57% | |||
| Biopharmaceutical | 669.61 | 673.53 | 0.58% | 0.38% | ||||
| Automotive | 264.38 | 268.39 | 1.52% | 9.85% | ||||
| ICT | 1,639.23 | 1,694.41 | 3.37% | 5.23% | ||||
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.
