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Strategist: Watch for Rally in Consumer Discretionary Stocks

Data could be pointing to a rally ahead for consumer discretionary stocks according to Brian Belski, chief market strategist with Oppenheimer.

Investors are focused on this sector in part because of Friday's jobs report, he says. Current market consensus expects the government to report a loss of 65,000 jobs. But there are other factors to consider, including Thursday's retail sales — up 2.9 percent in July versus a year ago, but below expectations, and "squishy" employment data: initial jobless claims rising to three-month highs.

Talking Numbers: Discretionary Stock Drivers

And then there was Tuesday's relatively strong ADP employment data, which showed a gain of 42,000 jobs for the private sector. But it's not only jobs that drives sales.

Longer term consumer sentiment has been recovering from historic lows and that is an important driver for how consumers spend their discretionary income.

Watch the video for more of why Belski thinks investors should be focused on consumer discretionary stocks.