The R&D Index for the week ending May 4, 2018 closed at 4,166.29 for the 25 companies included. The Index was up 0.75% (or 31.14 basis points) from the week ending April 27, 2018. Ten R&D Index companies gained value last week from 0.09% (Intel) to 13.25% (Apple). Fifteen R&D Index companies lost value last week from -0.03% (Astra Zeneca) to -5.84% (Pfizer).
At its regularly scheduled meeting last May 1-2, the Federal Reserve held its short-term interest rate steady at a range of 1.50% to 1.75% which was put in place at its March meeting. The Fed reiterated its plans to increase the interest rate (to likely 1.75%/2.0%) at its next meeting on June 12-13. And on Friday, the Labor Dept. released data indicating that the U.S. unemployment rate dropped to 3.9% in April from 4.1% in March, its lowest level since December 2000. The U.S. added 164,000 jobs in April and have created an average of 200,000 jobs per month in 2018, up from 182,000 in 2017. The U.S. has now created jobs for 91 consecutive months, the longest stretch on record. A report on those workers who no longer look for jobs (not included in the unemployment numbers) noted that number had dropped to 7.8%, its lowest level since 2001.
Adding to the jobs news, R&D Index member Apple stock rallied on Friday following reports on 25% profit increases on Tuesday, a $100 billion stock buyback plan and news that Warren Buffett’s Berkshire Hathaway had bought 75 million shares during 1Q 2018. As a result, Apple stock rose 13.25% for the week and led the overall market rise on Friday – the DJIA rose over 330 points on Friday. (Eight R&D Index members (AAPL, CSCO, IBM, INTC, JNJ, MRK, MSFT and PFE) are members of the 30 Dow Jones Industrials (DJIA)).
Japan’s big three automakers (and two R&D Index members)—Toyota, Honda and Nissan—all posted significantly lower U.S. sales figures in April, with Nissan sales falling 35% from April 2017. All these companies wagered that U.S. demand for small sedans would remain strong and continued to invest large amounts of resources (engineering and R&D) into new sedan models (compared to other automotive companies who have shifted their focus to SUVs and small truck designs) which are no longer sales drivers. These trends result in larger discounts now being offered by the Japanese companies to move inventory off of the showroom floor. To remain competitive, some Japanese companies
| R&D Index Week Ending May 4, 2018 |
| Ticker | Exchange | 2017 R&D billions$ | 04/27/18 | 05/04/18 | 5/4/18 to 4/27/18 | 5/4/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 17,774 | 1,572.62 | 1,580.95 | 0.53% | 35.19% |
| Alphabet/Google | GOOGL | NASDAQ | 15,845 | 1,030.05 | 1,048.21 | 1.76% | -0.49% |
| Microsoft | MSFT | NASDAQ | 13,987 | 95.82 | 95.16 | -0.69% | 11.25% |
| Intel | INTC | NASDAQ | 13,499 | 52.73 | 52.78 | 0.09% | 14.34% |
| Apple | AAPL | NASDAQ | 11,506 | 162.32 | 183.83 | 13.25% | 8.63% |
| Volkswagen AG | VLKAY | OTC | 11,260 | 41.05 | 40.53 | -1.27% | 0.22% |
| Roche Pharm | RHHBY | OTC | 10,174 | 27.68 | 28.23 | 1.99% | -10.61% |
| Toyota | TM | NYSE | 9,170 | 131.01 | 131.32 | 0.24% | 3.26% |
| Johnson & Johnson | JNJ | NYSE | 9,060 | 128.27 | 124.19 | -3.18% | -11.12% |
| Novartis | NVS | NYSE | 7,870 | 77.27 | 76.69 | -0.75% | -8.66% |
| General Motors | GM | NYSE | 7,468 | 37.65 | 36.71 | -2.50% | -10.44% |
| Pfizer | PFE | NYSE | 7,288 | 37.00 | 34.84 | -5.84% | -3.81% |
| Bristol-Myers Squibb | BMY | NYSE | 6,942 | 52.27 | 51.33 | -1.80% | -16.16% |
| Cisco | CSCO | NASDAQ | 6,827 | 44.71 | 45.30 | 1.32% | 18.28% |
| Qualcomm | QCOM | NASDAQ | 6,723 | 51.11 | 52.49 | 2.70% | -18.01% |
| Oracle | ORCL | NYSE | 6,702 | 45.53 | 45.71 | 0.40% | -3.32% |
| Honda | HMC | NYSE | 6,519 | 34.21 | 33.47 | -2.16% | -1.79% |
| Astra Zeneca PLC | AZN | NYSE | 6,363 | 35.59 | 35.58 | -0.03% | 2.54% |
| Merck & Co. | MRK | NYSE | 5,759 | 59.47 | 57.75 | -2.89% | 2.63% |
| Daimler | DDAIY | OTC | 5,084 | 79.58 | 79.30 | -0.35% | -6.22% |
| Bayer AG | BAYN | OTC | 4,880 | 29.84 | 30.57 | 2.45% | -1.67% |
| Sanofi SA | SNY | NYSE | 4,755 | 39.60 | 39.22 | -0.96% | -8.79% |
| IBM | IBM | NYSE | 4,628 | 146.48 | 143.91 | -1.75% | -6.20% |
| GlaxoSmithKline | GSK | NYSE | 4,508 | 40.56 | 39.82 | -1.82% | 12.26% |
| Eli Lilly Co | LLY | NYSE | 4,489 | 82.73 | 78.40 | -5.23% | -7.18% |
| Total | 209,080 | 4,135.15 | 4,166.29 | 0.75% | 9.88% | ||
| Biopharmaceutical | 610.28 | 596.62 | -2.24% | -6.45% | |||
| Automotive | 323.50 | 321.33 | -0.67% | -1.81% | |||
| ICT | 1,628.75 | 1,667.39 | 2.37% | 0.61% | |||
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.
