6 – 10 Dec. | Why Yoga, Videogames and Tesla Could Move the Market This Week

With Christmas fast approaching, the markets find themselves caught in the midst of some headwinds. The fifth wave of Covid-19 and the Omicron variant could lead to new economic restrictions. On the other hand, a consumer boom for the holiday season could help support retail stocks. As always, there’s plenty of excitement on the markets, so let’s take a look at the week ahead.

Lululemon is in good shape

The Canadian yoga-wear brand is on the rise! Indeed, the practice of yoga has spread widely in recent years and became even more popular during the Covid period. The United Nations even referred to yoga as a “lifeline” in the face of anxiety caused by the pandemic and lockdowns.

Lululemon captured this trend and increased its growth rapidly. This Wednesday, December 9th, the company will present its figures for the third quarter, which should be positive. The group’s revenue could increase by 28% year-on-year. Earnings-per-share are estimated to increase by 22%, from $1.16 to $1.41. Lululemon could also provide new sales data for Mirror, its interactive home gym.

There is only one downside for investors: the company’s ongoing dispute with Peloton. Lululemon has been accused of deliberately infringing six design patents and is now seeking damages. To be continued!

Update on the eurozone

This Tuesday, December 7th, we’ll get GDP figures for the eurozone. They will be crucial to understanding how the continent is recovering after four pandemic waves, and another in full swing. The European Commission has slightly increased its GDP growth forecast to 5% for the year 2021, while lowering its forecast to 4.3% for 2022.

Keep your eye on unemployment figures, too. The Commission has forecasted a drop in unemployment, with 1.5 million new jobs created in the second quarter. The official figures will be released on Tuesday.

Apple x Disney

Yes, the tech giant Apple and the magical entertainment world of Disney are coming together! A new Disney game called Disney Melee Mania will be added to the Apple Arcade catalogue. The most iconic Disney and Pixar characters like Mickey, Elsa and Buzz Lightyear will compete in matches for the title of Disney legend.

Analysts think this new virtual arena will drive lots of new users (and therefore subscriptions) to the Apple Arcade service.

Willkommen Tesla!

The electric car group will finally start production of the Model Y at the Berlin ‘gigafactory’ this week. And the project is… six months late! Tesla aims to produce 1,000 vehicles per week with the main goal of reaching 500,000 cars per year.

It’s Tesla’s first step to establishing a bigger presence in Europe which could help maximise the company’s growth in the long-term.

Economic and results calendar

Monday – New vehicle registrations in Germany (November). Construction PMI index in France, Germany, euro zone (November).

Tuesday – Inflation rate in the Netherlands. Industrial production in Germany (October). Trade balance in the United States (October) in France (October) and in Austria (September). Unemployment rate and GDP in the euro zone. Forecast ZEW index for December. Quarterly figures from AutoZone.

Wednesday – Weekly US oil stocks. Quarterly figures from Lululemon, Argan, TUI.

Thursday – Trade balance in Germany (October). Inflation rate in Ireland (November). Weekly unemployment figures for the United States. Quarterly figures from Broadcom, Chewy.

Friday – Inflation rate in Germany (November). Industrial production in Austria, Spain, Italy (October). Quarterly figures from Europacorp.

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

The BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.