Episode summary
BI Weekend: Homebuilder Sentiment, Natural Gas Outlook, Connie Chung | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Lindsay Dutch, Drew Reading, Vincent Piazza, Calvin Butler, Beth Kowitt, Connie Chung
Summary
Homebuilders enter 2026 with backlogs down 10% to 40%, continued price cuts, and more incentive spending even as lower rates could lift orders. Drew Reading said the sector still faces a difficult fundamental backdrop: revenue growth should stay sluggish and gross margins pressured, though resale housing may improve 5% to 10% from very low levels. He also said tariffs have not yet meaningfully raised costs, but could add about $10,000 per home next year, with smaller private builders most exposed.
Lindsay Dutch argued consumer hardlines retailers have held up better than expected and should see revenue gains extend into 2026, led by higher-income shoppers buying premium and exclusive products. She said promotions are broadly flat, brick-and-mortar expansion is returning, and younger shoppers, especially Gen Z, still favor in-person shopping. In beauty, she expects continued strength in fragrance and skin care, with Ulta leaning on salons and wellness to offset tougher comps.
Vincent Piazza was most constructive on natural gas versus oil, citing LNG exports, pipeline exports to Mexico, and AI-driven power demand as structural tailwinds. He expects tighter balances to support free cash flow and more M&A, with Expand and EQT highlighted as favored names. Calvin Butler said Exelon is trying to speed data-center hookups while protecting ratepayers through transmission security agreements, and Beth Kowitt and Connie Chung discussed Walmart’s reputational turnaround and the worsening state of media trust and DEI.
Key takeaways
- Drew Reading said 2026 should remain challenging for homebuilders because backlogs are down 10% to 40% and pricing pressure is likely to continue.
- Reading estimated tariffs could add about $10,000 per home, with smaller private builders more vulnerable than large production builders.
- Lindsay Dutch said consumer hardlines should keep benefiting from resilient higher-income shoppers, with promotions roughly flat into 2026.
- Dutch said Gen Z is helping revive in-store shopping, supporting brick-and-mortar expansion plans.
- Vincent Piazza said natural gas looks stronger than oil in 2026 because of LNG, Mexico exports, AI power demand, and tighter supply balances.
- Piazza said Expand and EQT are two key names to watch as natural gas consolidation continues.
Notable quotes
“2026 is going to be another challenging year for from a fundamental perspective um for the builders”
“there could be a $10,000 cost increase per home um, as it relates to tariffs”
“revenue gains should extend into 2026 for most consumer hardlines retailers”
“we are definitely uh more constructive on natural gas commodity relative uh to oil”
“We are protecting our residential customers. You know, we serve almost 11 million customers”
How the episode opens
Bloomberg Audio Studios podcasts, radio news. This is Bloomberg Intelligence — With Scarlett Fu and Paul Sweeney. — How do you think the Fed is looking at tariffs, the uncertainty of tariffs? — Let's take a look at the sectors and how they perform.
A lot of investors getting whipsawed every day by news events — Breaking market headlines — And corporate news from across the globe. — Could we see a market disruption, a market event? Are people just too exuberant out there? — You see some so-called lowquality stocks driving this short-term rally. Bloomberg Intelligence
With Scarlet Fu and Paul Sweeney — On Bloomberg Radio, YouTube, and Bloomberg Originals. — On today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. — Each and every week, we provide in-depth research and data on some of the 2,000 companies and 130 industries our analysts cover worldwide. Today, we look at the outlook for US oil and natural gas heading into the 2026 and why it's well positioned to benefit from structural demand.
Plus, we speak with award-winning journalist Connie Chung on the changes she is seeing in the media landscape. — But first, prospective homeowners in 2025 were boxed out by high borrowing cost and limited inventory, keeping affordability near record lows. That's according to the latest research from Bloomberg Intelligence. That pressure is now reshaping 2026 as builders look to ramp up construction to meet pent-up demand while still moving cautiously because of financing costs, labor shortages, and of course uncertain economic growth.
For more, I spoke with Drew Reading, Bloomberg Intelligence US home building analyst. I first asked Drew if lower interest rates will help the home building sector. — So, we actually think that 2026 is going to be another challenging year for from a fundamental perspective um for the builders.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- homebuilder sentiment
- consumer hardlines outlook
- natural gas e&ps
- data center energy grid
- walmart reputation rehab
Companies and tickers mentioned
- WMT
- Walmart
- Excelon
- Bloomberg L.P.
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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