How's the retail sector looking?
On Friday, the market got data that showed September retail sales surged 1.9%, and as consumers' sentiment improved in October as their expectations of economic prospects brightened.
"On a monthly basis, excluding auto sales (which because of their high ticket price can result in volatile monthly readings), retail sales were up 1.5%, also exceeding expectations for a 0.4% monthly gain. Excluding autos and gas, sales were also up 1.5 % in September, again exceeding expectations for a 0.45% advance," wrote Jim Cramer's Action Alerts PLUS team in an alert last week. "Core retail sales (i.e., retail sales excluding receipts from auto dealers, building materials retailers, gas stations, office supply stores, mobile homes and tobacco stores) were up 1.4% in September, also beating expectations for a 0.2% advance. While this group is not considered to have as big an impact on trading as the headline number unless there is significant deviation from expectations, we note the results because it is also what is known as the "control" group and is closely associated with personal consumption expenditure (PCE), which is a large portion of the gross domestic product (GDP)."
So, what about specific retail stocks?
TheStreet's Ed Ponsi broke down the best retail stock to own.
"Remember when retail stocks had no future? To be fair, retail was one of the worst sectors to own over the past six years. Here's a comparison chart, starting in January of 2015, comparing the SPDR S&P Retail ETF (XRT), in red, vs. the S&P 500 (green) and the Nasdaq 100 (blue)," he wrote.
Cramer discussed his favorite retail stocks at this moment.
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