The R&D Index for the week ending July 13, 2018 closed at 4,572.98 for the 25 companies in the R&D Index. The Index was up 3.90% (or 171.64 basis points) from the week ending July 6, 2018. Nineteen R&D Index companies gained value last week from 0.14% (Johnson & Johnson) to 5.99% (Amazon). Six R&D Index companies lost value last week from -0.04% (Toyota) to -2.37% (Volkswagen AG).
R&D Index member Johnson & Johnson was hit by a Missouri court ruling on Thursday stating the company should pay $4.69 billion in punitive and compensatory damages to 22 women and their families for selling talc powder that resulted in ovarian cancer. Appeals and court-based rulings are likely to substantially reduce the damages, according to analysts. J&J was only down 0.14% for the week but is down nearly 10% from the beginning of the year. The company has been battling more than 9,000 lawsuits over the talc issue over the past several years. The company is expected to increase its R&D investments by 5.3% in 2019 to $12.1 billion.
The President and chief legal officer of R&D Index member Microsoft, Brad Smith, posted a blog on Friday calling for the U.S. government to regulate facial recognition technologies. Smith stated that the only way to “manage the use of this technology is for the government to proactively manage this use itself.” R&D Index members Microsoft, Amazon, Apple and Google/Alphabet all have developed their own versions of facial recognition software, some of which has been offered for government applications.
The Labor Dept. reported on Friday that the consumer inflation rate in June had risen 2.9% from June 2017, the highest rate since February 2012. Much of that increase was associated with rising gasoline prices. Core inflation rose 2.3% over the past twelve months, the highest since January 2017. The CPI rose 0.1% in June over May. It was noted by Pantheon Macroeconomics that Chinese goods subject to the newly imposed U.S. tariffs could boost the CPI by up to 0.6%.
The U.S. Treasury Dept. noted last Thursday that the new lower tax rates resulted in a 7% reduction in tax receipts in June from the amount collected in June 2017. The budget deficit, however, fell to $75 billion in June 2018 compared to $90 billion in June 2017 due primarily to a 9% reduction in government outlays mostly because of shift in accounting procedures.
R&D Index Week Ending July 13, 2018
| Ticker | Exchange | 2018 R&D millions U.S. $ | 07/06/18 | 07/13/18 | 7/13/18 to 7/6/18 | 7/13/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 26,750 | 1,710.63 | 1,813.03 | 5.99% | 55.03% |
| Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,140.17 | 1,188.82 | 4.27% | 12.86% |
| Apple | AAPL | NASDAQ | 14,037 | 187.97 | 191.33 | 1.79% | 13.06% |
| Intel | INTC | NASDAQ | 13,702 | 51.37 | 52.22 | 1.65% | 13.13% |
| Microsoft | MSFT | NASDAQ | 13,558 | 101.16 | 105.43 | 4.22% | 23.25% |
| Roche Pharm | RHHBY | OTC | 12,284 | 28.32 | 29.05 | 2.58% | -8.01% |
| Johnson & Johnson | JNJ | NYSE | 11,493 | 125.75 | 125.93 | 0.14% | -9.87% |
| Merck & Co. | MRK | NYSE | 11,323 | 62.20 | 62.89 | 1.11% | 11.76% |
| Volkswagen AG | VLKAY | OTC | 10,915 | 34.11 | 33.30 | -2.37% | -17.66% |
| Toyota | TM | NYSE | 10,848 | 129.56 | 129.51 | -0.04% | 1.84% |
| Novartis | NVS | NYSE | 8,934 | 77.17 | 78.78 | 2.09% | -6.17% |
| Honda | HMC | NYSE | 8,180 | 29.19 | 29.30 | 0.38% | -14.02% |
| Pfizer | PFE | NYSE | 7,942 | 37.11 | 37.53 | 1.13% | 3.62% |
| Daimler | DDAIY | OTC | 7,615 | 68.27 | 67.01 | -1.85% | -20.75% |
| General Motors | GM | NYSE | 7,278 | 39.16 | 39.36 | 0.51% | -3.98% |
| Oracle | ORCL | NYSE | 7,001 | 46.00 | 48.63 | 5.72% | 2.86% |
| Bristol-Myers Squibb | BMY | NYSE | 6,981 | 56.56 | 56.86 | 0.53% | -7.21% |
| Eli Lilly Co | LLY | NYSE | 6,769 | 87.39 | 89.71 | 2.65% | 6.22% |
| GlaxoSmithKline | GSK | NYSE | 6,394 | 41.02 | 41.74 | 1.76% | 17.68% |
| Cisco | CSCO | NASDAQ | 6,009 | 42.71 | 41.78 | -2.18% | 9.09% |
| IBM | IBM | NYSE | 5,842 | 142.48 | 145.90 | 2.40% | -4.90% |
| Bayer AG | BAYN | OTC | 5,743 | 27.54 | 27.39 | -0.54% | -11.90% |
| Astra Zeneca PLC | AZN | NYSE | 5,483 | 35.18 | 37.16 | 5.63% | 7.09% |
| Qualcomm | QCOM | NASDAQ | 5,183 | 57.84 | 58.39 | 0.95% | -8.79% |
| Sanofi SA | SNY | NYSE | 4,694 | 42.48 | 41.93 | -1.29% | -2.49% |
| Total | 243,754 | 4,401.34 | 4,572.98 | 3.90% | 20.60% | ||
| Biopharmaceutical | 620.72 | 629.02 | 1.34% | -1.37% | |||
| Automotive | 300.29 | 298.48 | -0.60% | -8.79% | |||
| ICT | 1,769.70 | 1,832.50 | 3.55% | 10.57% | |||
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.
