The R&D Index for the holiday-shortened week ending May 31, 2019 closed at 4,426.78 for the 25 companies in the R&D Index. The Index was down -2.70% (or -122.86 basis points) from the week ending May 24, 2019. Only Qualcomm of the 25 R&D Index members gained value, rising 0.92% to 66.82. Twenty-four of the 25 R&D Index members lost value last week from -0.73% (Eli Lilly Company) to -5.55% (Johnson & Johnson).
The U.S. Commerce Department reported on Friday that the price index for personal-consumption expenditures rose 0.31% in April from March, the largest monthly inflation-based gain since January 2018. The rise confirms the federal reserve’s view that a slowdown in inflation earlier in 2019 was temporary and strengthens their position on holding the short-term interest rate at a range of 2.25% to 2.50% instead of lowering the interest rate later in 2019 as was hinted at with the recent drop in stock valuations. At a 1.51% gain in April from April 2018, the annual inflation rate is still far below the fed’s target of 2.00%.
Strong exports and inventory investments contributed to an annualized U.S. GDP of 3.1% in the first quarter according to a U.S. Commerce Department report issued last Thursday (downgraded from earlier 3.2% estimates). This beat out the 2.2% GDP growth in 4Q 2018, but officials were cautious about continued 2019 growth due to a slowing global economy and trade concerns.
R&D Index member Johnson & Johnson lost a court case last week on its talc powder product, with a New York jury awarding $325 million to the plaintiff. This follows a similar July 2018 St. Louis case where J&J was ordered to pay $4.7 billion to 22 women for supposedly talc-related ovarian cancer. J&J is appealing the 2018 case and is expected to appeal the NY case as well. More than 14,000 similar cases are pending. The company has won some similar cases and has succeeded in appeal as well.
R&D Index member Apple Computer announced last week that it already has recruited more than 1,000 people for its four R&D centers in China (Beijing, Shanghai, Shenzhen and Suzhou). Apple has about 13,000 employees in total in China and its $1.4 billion data center is on schedule in the Guian New Area, Guiyang, for a 2020 completion. Apple also continues to invest heavily in the China Development Research Foundation to support more than 300,000 students in less-developed areas in China work their way out of poverty.
| R&D Index Week Ending May 31, 2019 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 05/24/19 | 05/31/19 | 5/31/19 to 5/24/19 | 5/31/19 to 12/31/19 | ||
| 1 | Amazon | AMZN | NASDAQ | 26,750 | 1,823.28 | 1,775.07 | -2.64% | 18.18% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,138.61 | 1,106.50 | -2.82% | 5.89% |
| 3 | Apple | AAPL | NASDAQ | 14,037 | 178.97 | 175.07 | -2.18% | 10.99% |
| 4 | Intel | INTC | NASDAQ | 13,702 | 44.57 | 44.04 | -1.19% | -6.16% |
| 5 | Microsoft | MSFT | NASDAQ | 13,558 | 126.24 | 123.68 | -2.03% | 21.77% |
| 6 | Roche Pharm | RHHBY | OTC | 12,284 | 34.00 | 32.88 | -3.29% | 5.79% |
| 7 | Johnson & Johnson | JNJ | NYSE | 11,493 | 138.85 | 131.15 | -5.55% | 1.63% |
| 8 | Merck & Co. | MRK | NYSE | 11,323 | 81.17 | 79.21 | -2.41% | 3.66% |
| 9 | Volkswagen AG | VWAGY | OTC | 10,915 | 16.18 | 15.78 | -2.47% | 1.22% |
| 10 | Toyota | TM | NYSE | 10,848 | 118.55 | 117.58 | -0.82% | 1.29% |
| 11 | Novartis | NVS | NYSE | 8,934 | 87.52 | 85.64 | -2.15% | -0.20% |
| 12 | Honda | HMC | NYSE | 8,180 | 25.44 | 24.61 | -3.26% | -6.96% |
| 13 | Pfizer | PFE | NYSE | 7,942 | 41.95 | 41.52 | -1.02% | -4.88% |
| 14 | Daimler | DDAIY | OTC | 7,615 | 53.30 | 51.76 | -2.89% | -1.91% |
| 15 | General Motors | GM | NYSE | 7,278 | 35.12 | 33.34 | -5.07% | -0.33% |
| 16 | Oracle | ORCL | NYSE | 7,001 | 52.77 | 50.60 | -4.11% | 12.07% |
| 17 | Bristol-Myers Squibb | BMY | NYSE | 6,981 | 46.81 | 45.37 | -3.08% | -12.72% |
| 18 | Eli Lilly Co | LLY | NYSE | 6,769 | 116.79 | 115.94 | -0.73% | 0.19% |
| 19 | GlaxoSmithKline | GSK | NYSE | 6,394 | 40.18 | 38.64 | -3.83% | 1.13% |
| 20 | Cisco | CSCO | NASDAQ | 6,009 | 54.37 | 52.03 | -4.30% | 20.08% |
| 21 | IBM | IBM | NYSE | 5,842 | 132.28 | 126.99 | -4.00% | 11.72% |
| 22 | Bayer AG | BAYN | OTC | 5,743 | 15.18 | 14.75 | -2.83% | -16.05% |
| 23 | Astra Zeneca PLC | AZN | NYSE | 5,483 | 39.02 | 37.38 | -4.20% | -1.58% |
| 24 | Qualcomm | QCOM | NASDAQ | 5,183 | 66.21 | 66.82 | 0.92% | 17.43% |
| 25 | Sanofi SA | SNY | NYSE | 4,694 | 42.28 | 40.43 | -4.38% | -6.86% |
| Total | 243,754 | 4,549.64 | 4,426.78 | -2.70% | 9.92% | |||
| Biopharmaceutical | 683.75 | 662.91 | -3.05% | -1.19% | ||||
| Automotive | 248.59 | 243.07 | -2.22% | -0.52% | ||||
| ICT | 1,796.02 | 1,745.73 | -2.80% | 8.41% | ||||
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 2019 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
