The R&D Index for the week ending June 29, 2018 closed at 4,331.64 for the 25 companies in the R&D Index. The Index was down 1.78% (or 78.72 basis points) from the week ending June 22, 2018. Five R&D Index companies gained value last week from 0.02% (Sanofi SA) to 0.64% (Novartis). Twenty R&D Index companies lost value last week from -0.09% (Oracle) to -5.31% (Intel).
Recently released SEC data has allowed a computation of the 2018 industrial R&D investments. As a result, the 2018 R&D Index chart provided with this report has been modified to reflect the new data. Some positional shuffling can be seen with most top companies seeing substantial growth in their R&D budgets. R&D Index member Amazon has the largest increase growing from $17.8 billion in 2017 R&D spending to $26.8 billion in 2018 R&D. Our forecasts reveal their R&D will increase to about $31 billion in 2019.
The R&D Index and the DJIA both dropped last week (-1.8% and -1.3% respectively) due primarily to the trade tariff news from the U.S. and countries outside the U.S. R&D Index member General Motors stock dropped about 4.5% for the week. The company submitted a report to the Commerce Dept. on Friday stating that tariffs on vehicle imports would hurt its competitive position, cost U.S. jobs and result in a “smaller GM.” The tariffs would raise costs which would result in higher costs to consumers and lowered demand. Other vehicle manufacturers concurred with GM, including Toyota.
The Commerce Dept. reported on Friday that its measure of consumer prices rose 0.2% in May from April putting it 2.3% above its year-earlier level. Core prices (which excludes food and energy) were also reported as 2.0% up for the year, for the first time since April 2012. The Commerce Dept. also announced last week that U.S. economic growth at the beginning of the year was slower than the government previously reported. GDP growth was only reported as being 2.0% in 1Q, lower than the previous estimate of 2.2%. Analysts stated that the growth picked up in 2Q and still expected full year growth of 4.5%.
R&D Index member Amazon reported that it purchased the online pharmacy company PillPack for $1 billion which resulted in sharp selloffs among in numerous pharmacy companies, such as CVS and Walgreens. Amazon also announced that it is pushing into shipping which could affect UPS and FedEx.
R&D Index Week Ending June 29, 2018
|Ticker||Exchange||2018 R&D millions U.S. $||06/22/18||06/29/18||6/29/18 to 6/22/18||6/29/18 to 12/29/17|
|7||Johnson & Johnson||JNJ||NYSE||11,493||122.84||121.34||-1.22%||-13.15%|
|8||Merck & Co.||MRK||NYSE||11,323||61.47||60.70||-1.25%||7.87%|
|18||Eli Lilly Co||LLY||NYSE||6,769||85.92||85.33||-0.69%||1.03%|
|23||Astra Zeneca PLC||AZN||NYSE||5,483||35.06||35.11||0.14%||1.18%|
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.
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.