The R&D Index for the week ending November 30, 2018 closed at 4,392.40 for the 25 companies in the R&D Index. The Index was up 8.04% (or 326.92 basis points) from the week ending November 23, 2018. The stock of twenty-three R&D Index companies gained value last week from 0.12% (Oracle) to 12.52% (Amazon). The stock of two R&D Index companies lost value last week from -0.95% (Astra Zeneca) to -1.76% (Daimler).
The Federal Reserve indicated in their latest meeting summary last week that they still plan to raise short-term interest rates at their December meeting (December 18-19) to a range between 2.25% to 2.50%, their fourth increase for 2018. This decision was based on continuing data on low unemployment rates and inflation. The meeting minutes, however, indicated that the Fed governors were less sure about additional interest rate increases for 2019, three of which were forthcoming in earlier Fed communications. The Fed officials were not concerned about the October 2018 stock selloffs which eliminated any gains made during 2018. Fed Chairman Powell noted on Wednesday that a more aggressive interest rate approach was not likely, which triggered a broad market rally, erasing November market declines.
R&D Index member Bayer AG announced last week that it would cut 12,000 jobs and sell some businesses, including animal health and foot-care divisions. Bayer has been hit with 10,000 lawsuits associated with its Monsanto acquisition (which closed in June 2018) and its Roundup weedkiller cancer-producing allegations. Bayer’s stock has lost a third of its value since August. Part of the reasons for the Bayer selloff were associated with Bayer’s acquisition of R&D Index member Merck’s consumer health business in 2014 which failed to live up to sales expectations with less-advanced product development levels than Bayer originally believed.
R&D Index member General Motors announced last week that it would close four U.S. factories and eliminate six models by Spring 2019, which were associated with 6,000 jobs. The closures were allegedly being made to more closely focus on the emerging automotive electrification and autonomous driven trends, although one of the GM models being eliminated by the closures was the Chevrolet Volt electric-hybrid model.
| R&D Index Week Ending November 30, 2018 | |||||||
| Ticker | Exchange | 2018 R&D millions U.S. $ | 11/23/18 | 11/30/18 | 11/30/18 tp 11/23/18 | 11/30/18 to 12/29/17 | |
| Amazon | AMZN | NASDAQ | 26,750 | 1,502.06 | 1,690.17 | 12.52% | 44.52% |
| Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,030.10 | 1,109.65 | 7.72% | 5.34% |
| Apple | AAPL | NASDAQ | 14,037 | 172.29 | 178.58 | 3.65% | 5.52% |
| Intel | INTC | NASDAQ | 13,702 | 46.54 | 49.31 | 5.95% | 6.82% |
| Microsoft | MSFT | NASDAQ | 13,558 | 103.07 | 110.89 | 7.59% | 29.64% |
| Roche Pharm | RHHBY | OTC | 12,284 | 31.05 | 32.43 | 4.44% | 2.69% |
| Johnson & Johnson | JNJ | NYSE | 11,493 | 142.23 | 146.90 | 3.28% | 5.14% |
| Merck & Co. | MRK | NYSE | 11,323 | 74.67 | 79.34 | 6.25% | 41.00% |
| Volkswagen AG | VWAGY | OTC | 10,915 | 16.42 | 16.58 | 0.97% | -59.00% |
| Toyota | TM | NYSE | 10,848 | 119.71 | 121.48 | 1.48% | -4.47% |
| Novartis | NVS | NYSE | 8,934 | 88.03 | 91.53 | 3.98% | 9.02% |
| Honda | HMC | NYSE | 8,180 | 27.76 | 28.17 | 1.48% | -17.34% |
| Pfizer | PFE | NYSE | 7,942 | 43.14 | 46.23 | 7.16% | 27.64% |
| Daimler | DDAIY | OTC | 7,615 | 57.47 | 56.46 | -1.76% | -33.23% |
| General Motors | GM | NYSE | 7,278 | 35.93 | 37.95 | 5.62% | -7.42% |
| Oracle | ORCL | NYSE | 7,001 | 48.70 | 48.76 | 0.12% | 3.13% |
| Bristol-Myers Squibb | BMY | NYSE | 6,981 | 52.93 | 53.46 | 1.00% | -12.76% |
| Eli Lilly Co | LLY | NYSE | 6,769 | 112.87 | 118.64 | 5.11% | 40.47% |
| GlaxoSmithKline | GSK | NYSE | 6,394 | 40.66 | 41.87 | 2.98% | 18.04% |
| Cisco | CSCO | NASDAQ | 6,009 | 44.54 | 47.87 | 7.48% | 24.99% |
| IBM | IBM | NYSE | 5,842 | 117.17 | 124.27 | 6.06% | -19.00% |
| Bayer AG | BAYN | OTC | 5,743 | 17.77 | 18.43 | 3.71% | -40.72% |
| Astra Zeneca PLC | AZN | NYSE | 5,483 | 40.20 | 39.82 | -0.95% | 14.76% |
| Qualcomm | QCOM | NASDAQ | 5,183 | 55.25 | 58.26 | 5.45% | -9.00% |
| Sanofi SA | SNY | NYSE | 4,694 | 44.92 | 45.35 | 0.96% | 5.47% |
| Total | 243,754 | 4,065.48 | 4,392.40 | 8.04% | 15.84% | ||
| Biopharmaceutical | 688.47 | 714.00 | 3.71% | 11.96% | |||
| Automotive | 257.29 | 260.64 | 1.30% | -20.35% | |||
| ICT | 1,617.66 | 1,727.59 | 6.80% | 4.24% | |||
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.
