With the XRT up 17% year to date and the latest same-store sales figures calling some of the strength into question – how should you trade?
Several large retailers, including Target , Macy's , and Gap missed sales estimates for April, as an uncertain economy and cooler weather chilled shopper enthusiasm. Also, an earlier Easter hurt April sales by shifting demand into March.
How should you trade?
"The two names I like most in the space are Mastercard and Visa ," says Guy Adami. "They've pulled back after earnings but I think that presents a tremendous opportunity. Both companies put up great quarters and they always seem to pull back after results but in the past it's been a buying opportunity.
"And I'd also look at Home Depot," he says.
"I like TJX ," says Stephanie Link. "And I’m a buyer of Costco . They may have missed estimates but the story long-term seems sound."
"Macy’s disappointed, traded down, and then recovered. I like the action. I want to buy Macy’s," says Stephen Weiss.
"I like high-end retailers with big Asia exposure, like Coach , as a play on China’s consumer," says Brian Kelly.
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Trader disclosure: On May 3, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Stephanie Link is long JPM; Stephanie Link is long AAPL; Stephanie Link is long IBM; Stephanie Link is long FCX; Stephanie Link is long COST; Stephen Weiss is long MDRX; Stephen Weiss is long AIG; Stephen Weiss is short JCP
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The following companies are clients of SunTrust Robinson Humphrey, Inc. and the firm has received or is entitled to receive compensation for investment banking services involving their securities within the last 12 months: GMCR
The following companies are clients of SunTrust Robinson Humphrey, Inc. and the firm has received compensation for non-investment banking services within the last 12 months: GMCR An affiliate of SunTrust Robinson Humphrey, Inc. has received compensation for products or services other than investment banking services from the following companies within the last 12 months: GMCR
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