Robust Retail?

An unexpected rise in January retail salessent stocks higher Wednesday, but Jeff Macke urged skepticism on CNBC’s Closing Bell.

The “mediocre at best” government data – a 0.3% rise in sales when analysts expected a 0.3% contraction – is not a big enough boon to the sector, Macke said, which he thinks is still searching for a bottom.

As a general rule, government data should not be used as a primary trading tool, according to Macke. From the standpoint of a retail investor, he would rather hit the pavement and check out malls and shops firsthand, call specific companies and read analyst reports to best gauge the health of the industry. Those indicators are almost always better than the Fed’s monthly reports, he said.

With regard to specific retailers, Macke recommended the “terrific” wholesaler Costco and said it might be worth “rolling the dice” with Gap , which is gaining momentum thanks in part to the Street’s unbelievably low expectations for the company.

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