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 Tonight: What Home Depot sales tell us about the economy. Plus: Apple makes a huge unforced error. Let's get into it.

By Allison Morrow

🏡 HOME DEPOT LAND 

When you think of Home Depot, maybe you get a satisfying whiff of paint smell, visions of orange vests, a maze of wood pallets, that new belt sander you've had your eye on. It's Hogwarts for homeowners. 

 

But when you zoom in on the Depot, you also get a pretty good read on both the housing market and consumer spending — two giant forces in the US economy. When the pandemic set off a homebuying frenzy last year, you could see it all happen quarter to quarter in Home Depot earnings reports. 

 

So, where are we now? Housing is still hot, thanks to continued demand and a persistent shortage in housing inventory. But it looks like things are cooling off — prospective homebuyers can only take so many bidding wars before realizing renting for another year ain't the worst idea.

 

Although Home Depot's second-quarter earnings and revenue topped forecasts, sales growth was less impressive compared with the previous quarter, and fewer people are shopping. 

 

Home Depot shares, which are up more than 25% so far this year, fell more than 4% in early trading Tuesday. Lowe's, which reports earnings Wednesday, also fell as investors feared a trend is afoot. 

 

A trend, or, perhaps more accurately, a deadly virus that's sweeping the country, making consumers (rightly) fearful of another lockdown. Which in addition to being awful for our collective physical and mental health, would also derail our hearty economic recovery. 

 

Looking ahead:  

The federal government will report closely watched data on housing starts and building permits for July on Wednesday. A drop in either of those will be bad news for Home Depot (and, presumably, Lowe's), especially as lumber prices have sunk from their record highs in recent months. 

  💰 NUMBER OF THE DAY

$6.85 trillion

Apple, Google and other big companies are hoarding a record $6.85 trillion in cash on their balance sheets as of the end of the second quarter, according to data from S&P Global Ratings. (That figure excludes banks and other financial firms because they're required by law to hold massive amounts of cash on their books  — something we somehow didn't think to enforce till they nearly took down the entire global financial system in 2008…but I digress.) The stockpile is yet another sign that corporations are growing nervous about how the Delta variant could damage the global economy.

📱 APPLE'S FUMBLE 

 

Earlier this month, Apple announced a new program designed to help combat child exploitation and promote safety. Hard to find controversy in something like that, right? Except when you remember that we live on the internet, where no one's safe, regardless of intent.

 

What followed — outraged tweets and demands for more information — put Apple on defense just weeks ahead of its next iPhone launch, which is basically its Super Bowl.  It was a rare PR miscalculation for a company known for its meticulous PR efforts, CNN Business' Samantha Murphy Kelly writes.

 

WHY THE OUTRAGE?

The technology at the center of the criticism is a tool that will start checking iOS devices and iCloud photos for child abuse imagery, along with a new opt-in feature that will warn minors and their parents if incoming or sent image attachments in iMessage are sexually explicit and, if so, blur them.

 

To be clear: Many child safety and security experts praised the intent. But they also pointed to the Big Brother-y, "1984" energy of conducting searches directly on users' phones. 

 

How tech works: 

• The new tool turns photos on iPhones and iPads into unreadable hashes — or complex numbers — stored on user devices. 
• Those numbers will be matched against a database of hashes provided by the National Center for Missing and Exploited Children (NCMEC) once the pictures are uploaded to Apple's iCloud storage service. 
• iPhones and iPads will create a doubly-encrypted "safety voucher" that'll be encoded on photos. Once a certain number of safety vouchers are flagged as a match from NCMEC's photos, Apple's review team will decrypt the voucher, disable the account and alert NCMEC, which can inform law enforcement. 

Where that could go wrong: Pretty much the only thing stopping Apple from expanding its searches beyond child abuse imagery is its word. And Apple seemed to fumble at multiple turns when pressed for details on how the reports would be handled. The timing couldn't be worse, as public distrust and scrutiny on tech firms broadly is reaching a fever pitch. 

WHAT ELSE IS GOING ON?

📉 After hitting record highs the day before, US stocks fell Tuesday in response to a bigger-than-expected drop for retail sales. Though they're still up 100% from last year's lows. 

 

🚗 General Motors and Ford are locked in a trademark battle over which company gets to use the word "cruise" in branding for its self-driving vehicles.

 

👟 Serena Williams and Nike have launched a new line of women's apparel and shoes.

 

🍩 McDonald's is adding a sweet new item to its bakery menu next month: a glazed donut built for sharing (but look we're not here to judge if you want the whole thing, live your life).  

🌏 LAST THING...

Here's where we usually wrap things up with a silly tweet or gif, but today was one of those days when no attempt at humor felt quite right. Instead, I want to point you to CNN's Impact Your World, which is full of information about how to help people in need. 

 

Meanwhile, my CNN colleagues are covering all the latest news on the Taliban's takeover in Afghanistan and the earthquake and tropical storm devastating Haiti.