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.