The R&D Index for the week ending March 2, 2018 closed at 4,154.43 for the 25 companies in the R&D Index. The Index was down 1.74% (or 73.68 basis points) from the week ending February 23, 2018. Four R&D Index companies posted a gain for the week from 0.14% (Cisco) to 2.62% (Intel). Twenty-one R&D Index companies posted losses for the week from -0.36% (Oracle) to -8.51% (General Motors).
Global stock markets were rocked Thursday when the Trump Administration announced the imposition of a 25% tariff on steel imports and a 10% tariff on aluminum imports. The tariffs would be applied universally with details to be released next week. The top three suppliers of steel imports to the U.S. are Canada (16%), Brazil (14%) and South Korea (10%). The top three suppliers of aluminum imports to the U.S. are Canada (43%), Russia (11%) and China/UAE (both with 10% each). Steel and aluminum stocks responded to the news with 5% to 10% increases, while automotive stocks fell 2% to 5%. Global governments and economic organizations blasted the tariff plans and issued threats of economic retaliation, signaling a start of trade war rhetoric. U.S. steel and aluminum suppliers stated that any sanctions must exempt Canada since U.S. companies own substantial processing plants for steel and aluminum in Canada. The tariffs were announced following release of a Commerce Dept. study stating that key imported materials could undermine American military needs.
U.S. economic data noting an overall rise that beat earlier forecasts have now been revised downward, according to data from the Federal Reserve, Atlanta. The increases were made due to “soft survey” data. More recent hard figures move 1Q 2018 GDP increases from the earlier 5.4% range to a current 2.6% range. U.S. economic growth in 4Q 2017 was slightly weaker (2.5%) than originally forecast (2.6%). Business investment also was reduced by the Dept. of Commerce from 6.8% to 6.6%. U.S. policy makers remain upbeat about the full-year economic outlook, which includes U.S. tax cuts and continuing improvements in the global economy.
The U.S. consumer confidence index increased in February to 130.8 from 124.3 in January, its highest level since November 2000. Fed chief Jerome Powell responded in Congressional testimony last week that the Fed is still likely to have four rate increases in 2018, the first occurring in March.
Exports of U.S. thermal coal to Asia and Europe for rose 117% last year, reversing eight years of consecutive drops in mining jobs. The increase more than offset the decline in U.S. coal used in utilities last year. The increase of 1,200 mining jobs for this output last year is still small compared to the 60,000 miners who lost their jobs between 2011 and 2016.
|R&D Index Week Ending March 2, 2018|
|Ticker||Exchange||2017 R&D billions$||02/23/18||
|3/2/18 to 2/23/18||3/2/18 to 1/1/17|
|9||Johnson & Johnson||JNJ||NYSE||9,060||132.02||128.82||-2.42%||11.81%|
|18||Astra Zeneca PLC||AZN||NYSE||6,363||34.01||33.16||-2.50%||21.38%|
|19||Merck & Co.||MRK||NYSE||5,759||54.87||54.36||-0.93%||-7.66%|
|25||Eli Lilly Co||LLY||NYSE||4,489||78.75||77.23||-1.93%||5.00%|
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.