Episode summary
Home Depot’s Sales Fall Short on Lackluster Housing Recovery | Bloomberg Intelligence
Bloomberg Intelligence
· · 26 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Drew Reading, Caroline Hyde, Riley Griffin, Brendan Greeley
Summary
Home Depot’s latest quarter was described as relatively neutral: same-store sales were slightly below estimates, but the company kept its full-year guide for 0% to 2% growth. The guest said the bigger issue is not a weak business model but a lack of a new catalyst, because housing remains frozen by elevated mortgage rates near 6.7% and cautious consumers who are delaying big-ticket projects. He argued that the market has settled into a floor, with homebuilders likely to keep leaning on mortgage-rate buydowns and other incentives until rates ease.
The show then shifted to Meta and Alphabet’s AI spending. The guest said Meta is reassigning 7,000 employees toward AI-related work even as it cuts about 8,000 jobs, framing the move as part of a broader push for smaller, flatter teams. On Google’s deal with Blackstone, the discussion emphasized how capital-intensive AI infrastructure has become: Blackstone is putting in $5 billion in equity for a data-center venture that could reach $25 billion and 500 megawatts of compute.
Riley Griffin’s reporting on Meta’s Louisiana data center underscored the scale of that buildout. She said the project could reach $200 billion, span nearly 4,000 acres, and rely on 10 new natural gas plants, while local officials see it as a rare economic lifeline for a struggling farming region. Brendan Greeley then argued that the dollar is not simply a U.S. creation, but a long-evolving bank money system whose stability depends on regulation, history, and the willingness to extend that framework to stablecoins.
Key takeaways
- The guest said Home Depot’s quarter was stable but lacked a housing catalyst, with mortgage rates near 6.7% still freezing demand.
- Homebuilders are expected to keep using mortgage-rate buydowns and other incentives because 70% of mortgage holders still have rates at 5% or below.
- Meta is reassigning 7,000 workers to AI-focused roles while cutting about 8,000 jobs, highlighting the company’s shift toward flatter teams.
- Blackstone is backing Google’s AI cloud expansion with $5 billion in equity, in a deal that could scale to $25 billion and 500 megawatts of compute.
- Riley Griffin said Meta’s Louisiana data-center project could reach $200 billion and bring 7,500 workers into a parish of about 20,000 people.
- Brendan Greeley argued that stablecoins look like banks and should be regulated like them if policymakers want to preserve monetary sovereignty.
Notable quotes
“it was a relatively neutral quarter for Home Depot. I think the theme is really stability”
“the company's missing is kind of that next catalyst, and it's really housing that continues to remain frozen”
“Meta is planting a $200 billion data center there. What that looks like is nearly 4,000 acres”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. — Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, Vana mentioned Home Depot, so let's get a deeper read on what's going on there and check in with Drew Reading, our US home building analyst to recap Home Depot's results. And I mean, Drew, this company is just no matter what tethered to rising barn costs and consumer sentiment. And both of those are kind of working against it right now.
Yeah. So, it was a relatively neutral quarter for Home Depot. I think the theme is really stability.
Um, you know, they mentioned that during the call that demand is relatively in line with where it was a year ago. Um, they did have a slight miss on same store sales. Um, but I think what investors will latch on to and get a little bit of comfort with is the fact that they maintained their fullear same store sales guide.
Now, when they initially came out with that, it was calling for growth of 0 to 2%. So, I do think that they left themselves with a little bit of wiggle room to see how the rest of the year plays out. Um, but to your point, you know, we mentioned stability, that is the case, but what the company's missing is kind of that next catalyst, and it's really housing that continues to remain frozen um due to elevated rates.
We're back up near 6.7% um and that's after getting to a five handle earlier in the year. And then, as you mentioned, consumer confidence. Um, you know, we've heard this pretty much across the the housing ecosystem, and it's that consumers are worried about the outlook for the economy, the outlook for employment, and they're just pausing on these big purchasing decisions.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- home depot sales
- housing recovery
- interest rates and housing prices
- ai corporate restructuring
- ai data center investment
Companies and tickers mentioned
- HD
- META
- GOOGL
- GOOG
- BX
- Home Depot
- Meta Platforms
- Alphabet
- Blackstone Inc.
- Financial Times
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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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