Retail gross sales information and company earnings have supplied traders a combined image, however the panorama has some brilliant spots for traders, in accordance with Cowen. “There are a lot of crosscurrents with the buyer,” Oliver Chen, senior fairness analysis analyst at Cowen protecting retail and luxurious items, stated on CNBC’s ” Squawk on the Avenue ” Friday. “Inflation is definitely hurting the middle- to lower-income shopper.,” he added “Nevertheless, there is a tight labor market at 3.7% unemployment. There are many positives in regards to the shopper, too. The buyer goes out once more; inflation is negatively impacting shopper discretionary classes.” Chen named Walmart , Macy’s and Ulta Magnificence as a number of the agency’s favourite picks for this procuring season. “All three supply very robust worth to the buyer,” Chen stated. “At Walmart, you may have a shopper staples piece, 50% plus grocery. Ulta’s a magnificence retailer – all issues magnificence multi functional place, that is an excellent class. And Macy’s has achieved an excellent job throughout a various portfolio. All three are providing nice gifting assortments as properly, and so they have very clear inventories coming into a troublesome state of affairs.” Chen stated his workforce additionally likes recommending retail shares which have inflation resistance, like luxurious manufacturers, in addition to shares like Costco, “which provide distinctive worth.” Company earnings have been combined. For example, Goal warned of a weak vacation procuring season , whereas Lowe’s has raised its earnings forecast . On high of earnings, the newest U.S. retail gross sales information painted a optimistic image, whereas inflation continues to hold over traders like a darkish cloud. Chen stated he is watching retailers’ stock ranges, and that January shall be a telling month when shops start placing out clearance objects. “Retailers are actually calibrating to be as clear as potential for subsequent yr, so we’re optimistic that issues can get higher,” Chen stated. “Nevertheless, the financial savings charge is one thing to observe, additionally rising credit score utilization and these are all issues we’re interested by.”