The American consumer remains "pretty strong" and that's why Saira Malik—head of global equity research for TIAA-CREF—said she favors two retailers in particular.
She told CNBC's "Squawk Box" on Thursday that she likes Costco because 70 percent of its profits come from recurring membership fees. "They raise prices on their members every few years and have 90 percent retention rates."
"Customers love it. Where else can you go and buy a New York strip steak and an engagement ring in the same shopping cart," said Malik, a stock picker for TIAA-CREF with $523 billion in assets under management
Another retailer that she likes is Carmax, which she said could be a "game-changer in the used-car industry."
"This company has a great market-share opportunity," Malik said. "They have 2 percent market-share. We expect that to triple over the next five to 10 years. This is another retailer that deserves a premium because of their strong growth rate." She believes that growth will come through more store openings and the trend for better auto sales.
"We actually think the economy remains really strong," she said, and that consumer and manufacturing data will support" that through these October debt ceiling and budget negotiations."
Malik said the Federal Reserve decided at its September meeting not to taper its $85-billion-a-month bond-buying program because it wanted to see more strength in the economy and provide some support during the Washington budget uncertainty.
(Read more: Americans downbeat on economy ahead of DC battle)
She thinks the Fed will taper later this year or in early 2014.