Retail earnings reports are painting a mixed picture of consumer spending, with results from Kohl's (KSS) and Abercrombie & Fitch (ANF) pointing to ongoing market uncertainties. To shed light on these developments and their broader market implications, HSBC Global chief investment officer Willem Sels joins Catalysts.

Sels emphasizes that success in the retail sector largely depends on companies' "positioning" within the industry. He highlights a significant bifurcation in consumer behavior:

"At the top-end, clearly some consumers are benefiting from a healthy housing sector and healthy stock market," Sels explains. However, bottom-end consumers, although inflation has fallen, are still grappling with high prices— "so people feel they're still not better off."

This divide is creating distinct winners and losers in the retail space. Sels notes that companies operating in sectors such as leisure, travel, hospitality, and entertainment are "typically in a better environment" compared to those in the value segment, where "there is fierce competition."

"People are shifting their share of consumption more and more towards experiences rather than accumulating goods," Sels told Yahoo Finance.

Ultimately, Sels says, the space is "very much a stock picker's market, where people need to differentiate."

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith