The DJIA part of the stock market was down more than 600 points last Monday through Thursday and up about 119 points on Friday to end the week about 500 points down. Alternatively, the R&D Index was down just 28 points by Thursday and ended the week just 40 points down. The DJIA’s wild ride was due primarily to the increased trade war pronouncements by Trump and European and Asian leaders. The five automotive members of the R&D Index were all down significantly (average of -5.06%), which took the brunt of the DJIA and R&D Index market declines due to their focus in the trade discussions. Germany-based Daimler was particularly hard hit (-7.33%) with their corporate leaders stating that 2018 profits were going to be severely affected by the ongoing tariff events. These will likely have a moderating effect on monies available for R&D investments, as well. The five automotive R&D Index members all have global production facilities that would be affected by the global tariffs on both sides, which is likely to increase their costs and depress sales. They also have a combined 2018 R&D of about $39.6 billion which could see a decline in 2019 to offset their economic issues.

The Trump administration has proposed a sweeping reorganization of several government agencies including the creation of a new Dept. of Health and Public Welfare, which would replace the Dept. of Health and Human Services. HHS includes the R&D-heavy National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC). These changes would require Congressional approval which is unlikely to occur until after the November elections, but it makes a statement for Trump’s goal of shrinking the overall government. The proposal also would combine the Dept. of Labor with the Dept. of Education to support job training concerns.

GE, one of the original 12 DJIA members, was dropped and replaced by Walgreens Boots Alliance ending GE’s 111-year history on the index. GE stock has dropped 55% over the past year. It was expected to spend $3.7 billion on R&D in 2018, down from $4.2 billion in 2017. It has been divesting itself from many of its divisions over the past several years, including its locomotive business, and would be expected to slowly lower its R&D presence.

R&D Index Week Ending June 22, 2018

	Ticker	Exchange	2017 R&D billions$	06/15/18	06/22/18	6/22/18 to 6/15/18	6/22/18 to 12/29/17
Amazon	AMZN	NASDAQ	17,774	1,715.97	1,715.67	-0.02%	46.70%
Alphabet/Google	GOOGL	NASDAQ	15,845	1,159.27	1,155.48	-0.33%	9.69%
Microsoft	MSFT	NASDAQ	13,987	100.13	100.41	0.28%	17.38%
Intel	INTC	NASDAQ	13,499	55.11	52.50	-4.74%	13.73%
Apple	AAPL	NASDAQ	11,506	188.84	184.92	-2.08%	9.27%
Volkswagen AG	VLKAY	OTC	11,260	36.74	34.58	-5.88%	-14.49%
Roche Pharm	RHHBY	OTC	10,174	26.64	27.77	4.24%	-12.06%
Toyota	TM	NYSE	9,170	135.81	131.00	-3.54%	3.01%
Johnson & Johnson	JNJ	NYSE	9,060	122.61	122.84	0.19%	-12.08%
Novartis	NVS	NYSE	7,870	75.79	75.06	-0.96%	-10.60%
General Motors	GM	NYSE	7,468	43.91	41.25	-6.06%	0.63%
Pfizer	PFE	NYSE	7,288	36.36	36.51	0.41%	0.80%
Bristol-Myers Squibb	BMY	NYSE	6,942	54.80	55.14	0.62%	-10.02%
Cisco	CSCO	NASDAQ	6,827	44.25	43.20	-2.37%	12.79%
Qualcomm	QCOM	NASDAQ	6,723	59.86	58.50	-2.27%	-8.62%
Oracle	ORCL	NYSE	6,702	46.28	44.10	-4.71%	-6.73%
Honda	HMC	NYSE	6,519	31.82	30.54	-4.02%	-10.39%
Astra Zeneca PLC	AZN	NYSE	6,363	36.41	35.06	-3.71%	1.04%
Merck & Co.	MRK	NYSE	5,759	62.03	61.47	-0.90%	9.24%
Daimler	DDAIY	OTC	5,084	72.57	67.25	-7.33%	-20.47%
Bayer AG	BAYN	OTC	4,880	31.53	29.02	-7.96%	-6.66%
Sanofi SA	SNY	NYSE	4,755	39.94	40.00	0.15%	-6.98%
IBM	IBM	NYSE	4,628	145.39	141.28	-2.83%	-7.91%
GlaxoSmithKline	GSK	NYSE	4,508	41.44	40.89	-1.33%	15.28%
Eli Lilly Co	LLY	NYSE	4,489	86.88	85.92	-1.10%	1.73%
Total			209,080	4,450.38	4,410.36	-0.90%	16.31%
		Biopharmaceutical		614.43	609.68	-0.77%	-4.40%
		Automotive		320.85	304.62	-5.06%	-6.91%
		ICT		1,799.13	1,780.39	-1.04%	7.42%

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.