NEW YORK (TheStreet) -- TheStreet's Jim Cramer says July's aggregate retail sales were surprisingly weak and investors don't really know why, given the fact that employment numbers are improving, gasoline prices are decreasing and home affordability is getting better.
Cramer theorizes that Amazon (AMZN - Get Report) is taking a lot of sales, as the online retailer's sales spiked recently. He points to Macy's (M - Get Report) number on Wednesday, which indicated that J.C. Penney (JCP - Get Report) could be taking some sales. Cramer says there is more competition in retail than investors thought, which is driving the price down and overall in aggregate is taking down retail sales.
Cramer suggests investors watch autos, which did not report good numbers. Ford (F - Get Report) received an upgrade, but Cramer preaches caution in autos. He adds he likes GM (GM - Get Report) because of yield, which will benefit from lower interest rates thanks to the retail sales number.
"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself." You can view the full analysis from the report here: GM Ratings Report EXCLUSIVE OFFER: See inside Jim Cramer’s multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.
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