The R&D Index for the week ending December 14, 2018 closed at 4,159.18 for the 25 companies in the R&D Index. The Index was down -0.78% (or -32.62 basis points) from the week ending December 7, 2018. The stock of fifteen R&D Index members gained value from 0.07% (Honda) to 3.50% (Honda). The stock of ten R&D Index members lost value from -0.27% (Pfizer) to -8.55% (Johnson & Johnson).
While economic indicators continue to yield strong positive data about the U.S. economy, similar data for China and Europe reveal an economic slowdown in those areas. The IMF notes that these data could “come back and affect the U.S.” These resulted in DJIA losses last week and its sinking into “correction” territory for the first time in almost three years.
R&D Index member Johnson & Johnson was the big R&D Index loser last week following a Reuters report saying the company knew for decades that asbestos was present in its baby powder. Interestingly, a court case in July awarded plaintiffs $4.7 billion for this cancer-related news and an analyst stated that the company’s liability would just be $6.5 billion even if the current number of cases against J&J were to double. Earlier in the week, Bloomberg reported that the company was willing to pay $400 million to settle 3,300 of the pending 10,000 lawsuits targeting J&J’s hip-replacement devices.
The Federal Reserve’s last meeting for 2018 is scheduled for December 18-19 and it’s previously mentioned fourth 2018 interest rate hike is still on the docket. If passed, this would raise the interest rate to a range between 2.25% and 2.50%. The three rate increases for 2019 that the Fed has mentioned, however, are now being listed as questionable, especially the one for March 2019 which may be eliminated due to weakening economic data such as the stock market’s recent slide and the global economic slowdown. Some analysts say that there may not be any rate increases at all in 2019 and that the Fed may even reverse course and lower rates in 2020 to ward off a possible recession.
R&D Index member Apple Computer announced last week that it plans to build a second campus in Austin, Texas, for 5,000 employees. Apple also stated that it would add more than 1,000 employees each in San Diego, Seattle and Culver City, California. These moves support Apple’s transition from heavy reliance on its iPhone products to more reliance on video programming (Culver City), machine learning (Seattle) and customized-chip products (Austin and San Diego) for all of its electronic products. Apple currently has a total workforce of about 132,000, these changes would boost that to more than 140,000.
| R&D Index Week Ending December 14, 2018 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 12/07/18 | 12/14/18 | 12/14/18 to 12/7/18 | 12/14/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 26,750 | 1,629.13 | 1,591.91 | -2.30% | 36.12% |
| Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,036.58 | 1,051.71 | 1.46% | -0.16% |
| Apple | AAPL | NASDAQ | 14,037 | 168.49 | 165.48 | -1.79% | -2.22% |
| Intel | INTC | NASDAQ | 13,702 | 46.24 | 47.86 | 3.50% | 3.68% |
| Microsoft | MSFT | NASDAQ | 13,558 | 104.82 | 106.03 | 1.15% | 23.95% |
| Roche Pharm | RHHBY | OTC | 12,284 | 31.50 | 31.09 | -1.30% | -1.55% |
| Johnson & Johnson | JNJ | NYSE | 11,493 | 145.43 | 133.00 | -8.55% | -4.81% |
| Merck & Co. | MRK | NYSE | 11,323 | 76.72 | 76.48 | -0.31% | 35.92% |
| Volkswagen AG | VWAGY | OTC | 10,915 | 15.85 | 16.40 | 3.47% | -59.45% |
| Toyota | TM | NYSE | 10,848 | 119.97 | 120.10 | 0.11% | -5.56% |
| Novartis | NVS | NYSE | 8,934 | 87.08 | 87.39 | 0.36% | 4.09% |
| Honda | HMC | NYSE | 8,180 | 26.89 | 26.91 | 0.07% | -21.04% |
| Pfizer | PFE | NYSE | 7,942 | 43.92 | 43.80 | -0.27% | 20.93% |
| Daimler | DDAIY | OTC | 7,615 | 53.00 | 53.31 | 0.58% | -36.96% |
| General Motors | GM | NYSE | 7,278 | 34.69 | 35.10 | 1.18% | -14.37% |
| Oracle | ORCL | NYSE | 7,001 | 46.00 | 46.60 | 1.30% | -1.44% |
| Bristol-Myers Squibb | BMY | NYSE | 6,981 | 53.08 | 52.12 | -1.81% | -14.95% |
| Eli Lilly Co | LLY | NYSE | 6,769 | 113.58 | 111.93 | -1.45% | 32.52% |
| GlaxoSmithKline | GSK | NYSE | 6,394 | 37.30 | 37.61 | 0.83% | 6.03% |
| Cisco | CSCO | NASDAQ | 6,009 | 46.44 | 45.82 | -1.34% | 19.63% |
| IBM | IBM | NYSE | 5,842 | 119.34 | 119.90 | 0.47% | -21.85% |
| Bayer AG | BAYN | OTC | 5,743 | 18.10 | 17.81 | -1.60% | -42.71% |
| Astra Zeneca PLC | AZN | NYSE | 5,483 | 38.18 | 39.15 | 2.54% | 12.82% |
| Qualcomm | QCOM | NASDAQ | 5,183 | 55.99 | 57.62 | 2.91% | -10.00% |
| Sanofi SA | SNY | NYSE | 4,694 | 43.48 | 44.05 | 1.31% | 2.44% |
| Total | 243,754 | 4,191.80 | 4,159.18 | -0.78% | 9.69% | ||
| Biopharmaceutical | 688.37 | 674.43 | -2.03% | 5.75% | |||
| Automotive | 250.40 | 251.82 | 0.57% | -23.05% | |||
| ICT | 1,623.90 | 1,641.02 | 1.05% | -0.99% | |||
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.
