The R&D World Index (RDWI) for the week ending June 18, 2021 closed at 4,995.39 for the 25 companies in the R&D World Index. The Index was down 1.48% (or -75.26 basis points) from the week ending June 11, 2021. The stock of 5 R&D World Index members gained value from 0.31% (Alibaba) to 2.44% (Apple). The stock of 20 R&D World Index members lost value from -0.68% (Astra Zeneca PLC) to -8.29% (Oracle).
The stock market had its worst week in nearly eight months last week as investors reacted to hints that the Federal Reserve might raise interest rates by up to 0.5% as soon as the end of 2023 from its current near-zero level. This was significantly earlier than the Fed had previously revealed. Brazil, the world’s ninth largest economy, raised its interest rates last week for the third time since the pandemic’s onset, to 4.25% to ensure inflation doesn’t get out of control, as it has several times in the past in that country. The Fed still believes that recent monthly inflation rate data reflect “transitory factors” due to the pandemic, although they significantly raised their inflation forecasts for this year and slightly more for 2022 and 2023. They also raised slightly their economic growth forecasts at last week’s meeting. Fourth quarter GDP growth is now forecast to increase by 7% (up from 6.5%) and 2022 GDP growth is now forecast to be a strong 3.3%. The increased growth and continued low interest rates through 2023 are strong support indicators for R&D investment growth. Of course, this forecast could change with weak PCE (personal consumption expenditures) data for May that is released on Friday, June 25.
The U.S. Department of Health and Human Services (HHS) last week announced that it will invest $3.2 billion on developing and manufacturing antiviral pills to treat the coronavirus. New oral antivirals that prevent illness and death could be taken at home early in the course of the disease. The new investment could accelerate clinical trials already in progress for some antiviral pills and even make some available by the end of 2021. These antiviral pills would complement the existing coronavirus vaccines. RDW Index member Merck & Co. and its R&D partner Ridgeback Biotherapeutics stated in April that they are testing an oral antiviral drug, molnupiravir for patients who are at high risk of COVID-19 complications. RDW Index member Pfizer has also said that it is testing an oral COVID-19 treatment which could be available by the end of 2021. The National Institutes of Health (NIH) stated last week that it would evaluate, prioritize and advance antiviral candidates to Phase 2 clinical trials.
A federal judge ordered a mistrial last week after a jury deadlocked on if a former University of Tennessee researcher hid his nanotechnology research in the Beijing University of Technology, China, to obtain U.S. NASA research grants. The mistrial reveals the challenges that federal investigators face in trying to prove scientific collaborations are raising China’s competitiveness. This particular case is seen as part of a federal initiative to prevent the transfer of trade secrets and other proprietary information to China, especially with researchers receiving U.S. funded grants and then performing their research work in China.
RDW Index member General Motors last week raised its investment in the development of electric vehicles (EVs) from $5.5 billion to between $8.5 billion and $9.5 billion for the first half of 2021. GM stated that it will spend $35 billion on EVs and autonomous vehicles through 2025, about 30% higher than it stated it would spend last November. The increase reflects its plans to add two more U.S. battery factories joining one being built in Ohio and another planned for Tennessee. Two weeks ago, RDW Index member Ford Motor Co. announced that it was increasing its EV investment by about a third to $30 billion by 2025. Ford announced last week that it expects half of its Lincoln luxury brand to be fully electric by 2025. Ford has stated that it will need 10 global battery factories by 2030. RDW Index member Volkswagen expects to spend $40 billion on development of EVs by 2025.
A new trade agreement reached last week between the U.S. and the European Union (EU) revealed that tariffs on large aircraft parts and components have been suspended for five years, which resolves a 17-year trade dispute between Boeing and Airbus. Both sides will now have a more open and transparent process in the way government funding is provided to the support of R&D for new aircraft programs and technologies developed by Boeing and Airbus. Each side will not provide government-funded R&D monies for commercial aircraft development which would cause negative effects to the other side. The long legal dispute began with World Trade Organization (WTO) findings of funding bias on both sides.
Intellian Technology announced last week the opening of its new R&D Center in Pyeongtaek, South Korea, next to its headquarters facilities. The new eight-story building will utilize emerging phased array antenna technologies for testing and development. A new European headquarters and logistics center will be completed this summer in Rotterdam, the Netherlands, along with the occupancy of new offices in London and a new R&D facility focused on emerging technologies in Maryland. Intellian is the leading global manufacturer of satellite antenna systems supporting maritime, offshore energy, defense and yachting industries.
Cambridge Mobile Telematics, Massachusetts, announced last week that it had purchased one of its rivals, Boston-based TrueMotion. These telematics companies rely on smartphone apps to score behavior of vehicular drivers, including braking, speeding, acceleration and even distracted driving. The merger will provide telematics services to 21 of the 25 largest global auto insurers, including State Farm and Progressive. The deal will allow the firms to combine workforces, which includes computer scientists, data experts and engineers. They also are becoming involved in ways to evaluate the quality of autonomous vehicles’ sensor data, artificial intelligence (AI) algorithms and software.
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2019 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies) and ICT (9 companies) who invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ. NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.