The R&D Index for the week ending May 18, 2018 closed at 4,202.36 for the 25 companies in the R&D Index. The Index was down -1.70% (or 72.77 basis points) from the week ending May 11, 2018. Seven R&D Index companies gained value last week from 0.39% (Pfizer) to 4.13% (Qualcomm). Seventeen R&D Index companies lost value last week from -0.04% (IBM) to -5.92% (Cisco). One R&D Index company (GlaxoSmithKline) was unchanged for the week at 40.03.

Capital spending (capex) at U.S. industrial firms rose 24% to $166 billion in 1Q 2018 from 1Q 2017, according to a report released last week by Credit Suisse. This is a record increase for the first quarter and is credited in part to the U.S. tax code changes and large cash reserves. More than half of the capex spending is credited to the technology industry. Some companies, such as R&D Index member Google/Alphabet have sustained large capex investments ($7.3 billion in 1Q 2018) that have worried investors about the sustainability of these investments. Google’s stock value has fallen recently as a result, despite strong 1Q profit reports. Large capex investments have also been reported for R&D Index members Amazon and General Motors with mixed stock investment responses.

U.S. recycler organizations are likely to increase the cost to consumers this year by as much as 3%, according to recycling consultants. Some recycling companies are losing money on all of their operations and have closed or are likely to close. Collection companies that used to sell recycling waste for up to $150/ton last year now find that they have to pay processors up to $5/ton to accept the materials. Much of the recycling waste previously was shipped to China for processing, but China put a freeze on those imports, until at least June 4, partly in response to the ongoing U.S.-China trade disputes.

China’s Tianqi Lithium last week agreed to pay $4.1 billion for a 24% share of Sociedad Quimica y Minera de Chile that would allow both companies to control about 70% of the global lithium market. The purchase represents a 20% premium over the Chilean mining concern’s current value which is already inflated at 30 times expected earnings. Toyota, VW, BMW and Apple are all looking to secure lithium and cobalt supplies for their future electric product and battery needs. Both materials are currently in an oversupply status and analysts question companies’ panic to currently overpay for future supply security.

R&D Index Week Ending May 18, 2018

	Ticker	Exchange	2017 R&D billions$	05/11/18	05/18/18	5/18/18 to 5/11/18	5/18/18 to 12/29/17
Amazon	AMZN	NASDAQ	17,774	1,602.91	1,574.37	-1.78%	34.62%
Alphabet/Google	GOOGL	NASDAQ	15,845	1,103.38	1,069.64	-3.06%	1.54%
Microsoft	MSFT	NASDAQ	13,987	97.70	96.36	-1.37%	12.65%
Intel	INTC	NASDAQ	13,499	54.67	53.50	-2.14%	15.90%
Apple	AAPL	NASDAQ	11,506	188.59	186.31	-1.21%	10.09%
Volkswagen AG	VLKAY	OTC	11,260	40.40	40.19	-0.52%	-0.62%
Roche Pharm	RHHBY	OTC	10,174	27.72	27.93	0.76%	-11.56%
Toyota	TM	NYSE	9,170	138.07	136.04	-1.47%	6.97%
Johnson & Johnson	JNJ	NYSE	9,060	127.24	124.24	-2.36%	-11.08%
Novartis	NVS	NYSE	7,870	77.55	77.06	-0.63%	-8.22%
General Motors	GM	NYSE	7,468	36.89	37.79	2.44%	-7.81%
Pfizer	PFE	NYSE	7,288	35.50	35.64	0.39%	-1.60%
Bristol-Myers Squibb	BMY	NYSE	6,942	51.86	52.71	1.64%	-13.98%
Cisco	CSCO	NASDAQ	6,827	45.93	43.21	-5.92%	12.82%
Qualcomm	QCOM	NASDAQ	6,723	55.23	57.51	4.13%	-10.17%
Oracle	ORCL	NYSE	6,702	46.82	46.32	-1.07%	-2.03%
Honda	HMC	NYSE	6,519	33.08	32.98	-0.30%	-3.23%
Astra Zeneca PLC	AZN	NYSE	6,363	36.40	36.33	-0.19%	4.70%
Merck & Co.	MRK	NYSE	5,759	59.69	59.14	-0.92%	5.10%
Daimler	DDAIY	OTC	5,084	79.92	79.26	-0.83%	-6.27%
Bayer AG	BAYN	OTC	4,880	30.58	30.77	0.62%	-1.03%
Sanofi SA	SNY	NYSE	4,755	38.38	38.88	1.30%	-9.58%
IBM	IBM	NYSE	4,628	144.14	144.08	-0.04%	-6.09%
GlaxoSmithKline	GSK	NYSE	4,508	40.03	40.03	0.00%	12.86%
Eli Lilly Co	LLY	NYSE	4,489	82.45	82.07	-0.46%	-2.83%
Total			209,080	4,275.13	4,202.36	-1.70%	10.83%
		Biopharmaceutical		607.40	604.80	-0.43%	-5.17%
		Automotive		328.36	326.26	-0.64%	-0.30%
		ICT		1,736.46	1,696.93	-2.28%	2.39%