Two non-retail stocks could get a boost from Black Friday shopping, says ERShares’ Eva Ados.
The National Retail Federation expects 2 million more Thanksgiving weekend customers than last year, still below 2019 levels, but a sign that one of the year’s largest retail holidays remains intact.
The rise in “buy now, pay later” options could give Affirm and Square a boost, Ados told CNBC’s “Trading Nation” on Wednesday.
“Because it is expected to be a very strong holiday season and we have limited availability, consumers have an incentive to buy as much as they can now,” said the company’s investment strategist and chief operating officer.
“But what do they do if they do not have a credit card like two-thirds of millennials, or if they do not have enough cash? This is where one buys now, pays later.”
From Affirm’s exclusive deal with Amazon to Square’s upcoming acquisition of Australian fintech company AfterPay, both have catalysts in place to take them higher during the shopping rush, Ados said.
The time to buy traditional retail stocks is probably over, Blue Line Capital founder and president Bill Baruch said in the same interview.
“This is not the time to really chase retail names,” said Baruch, whose company owns shares in Lululemon, Kohl’s and Target. “I would not add exposure at these levels.”
With discretionary consumer stocks facing opposition to the S&P 500, the buying opportunity in retail is probably over, he said.
“The time to buy retail stocks was through the August weakness,” Baruch said.
“It’s been over the last four or five weeks, but it’s hit a high point again. I think it’s up there. [against] a lot of resistance, “he said.” I do not see consumer estimates surpassing the S&P 500 for at least the next few weeks or months. “