NEW YORK (TheStreet) -- Retail spending had its biggest jump in eight months, finally showing some proof that falling gas prices are giving a boost to consumer spending. "We've all heard the theory that lower oil prices will help the consumer, but it's nice to finally see the evidence," Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said Thursday on CNBC's "Fast Money Halftime" show.
Lower oil prices are good for everyone, except for highly leveraged energy companies, he added. Half of the U.S. population lives paycheck to paycheck, with 20% of their costs coming from energy. While oil is slightly lower on Thursday, many energy stocks are higher on the day, Brown said. The selling momentum is waning, as energy stocks and consumer discretionary stocks lead the rally higher.
The average consumer saw a $180 bump in wages last month and is experiencing roughly double that savings from lower gas prices, according to Jon Najarian, co-founder of optionmonster.com and trademonster.com. His top pick is Michael Kors (KORS) , which he says can go to $80.
About 70% of U.S. GDP is driven by consumer spending, said Stephanie Link, chief investment officer of TheStreet and co-manager of the Action Alerts PLUS portfolio. Consumer confidence has continued to move higher throughout 2014, which is driving higher spending, she reasoned.
West Texas Intermediate prices should eventually rebound to the $75 to $85 price range, according to Tom Petrie, chairman of Petrie Partners. However, it may take the "better part of a year" for that move to occur, he said. Prices have overshot to the downside and can continue lower in the short term. This is a "healthy correction" and the high quality companies should prevail, he concluded.
Junk bond funds like the iShares High Yield Corporate Bond ETF (HYG) and the SPDR High Yield Bond ETF (JNK) have too much exposure to junk credit energy companies that will be in trouble if oil prices don't rally, Brown added.
GoPro (GPRO) is lower on Thursday amid short-selling amid concerns regarding its Dec. 23 lockup expiration. Shares are down 35% from the record high set on Oct. 7. GoPro "owns this space," Najarian said of wearable cameras. While it's a potential media play, there are questions as to just how valuable the wearable camera market is. It's a "great" company, but the stock is ahead of itself in regards to valuation, he said.
"Why not just buy Best Buy (BBY) ?" Link asked. The company sells GoPro's devices as well Apple's (AAPL) iPhone, and other appliances and consumer electronics, she said. Value investors don't like GoPro, while the momentum traders are avoiding it as it continues lower, Brown said. As a result, the stock is not a buy near current levels.
That led to a discussion of technology stocks Yelp (YELP) and TripAdvisor (TRIP) . Najarian likes these two stocks going into 2015 because they have a strong business and could be acquisition targets in the future.
While Amazon (AMZN) is down 22% on the year and is somewhat of a controversial stock, Link reasoned that the company's sales growth remains very strong -- two to three times greater than the industry average -- while the potential for margin expansion and operational leverage is viable if management would just tweak a few things. The stock can come back to life in 2015.
Of the social stocks, LinkedIn (LNKD) seems to be the least discussed, Brown said. However, with support near $200 per share and expectations for earnings per share to grow 43% next year, investors can buy the stock, which has an attractive risk-to-reward profile.
-- Written by Bret Kenwell