Stocks set their fourth-straight record

The pandemic has forced a lot of people to reconsider their living situation. On top of that, mortgage rates are very attractive. That's why America's housing market is booming.

"Things are busier than ever before," Robert Reffkin, founder and CEO of Compass, said on the CNN Business digital live show Markets Now.

The real estate firm set a revenue record in June and then again in July, Reffkin said. And August could be even better.

And even New York City, which has seen many residents looking to leave, will likely come back in just a matter of time, he said.

"I'm firmly betting on New York City," Reffkin said. "We just need to wait until a vaccine comes, and that's just a matter of time."

New buyers are driven by ultra-low mortgage rates, while wealthy buyers are looking for good deals to put their money to work, he added.

CNN Business and Moody's Analytics have created an index to track how far along we are in the recovery from the pandemic shock.

The index is composed of a wide array of data, which is compared with the data before Covid-19 outbreak.

As last week, the index stood at 78% of where we were pre-pandemic, said Mark Zandi, chief economist at Moody's Analytics.

"While we have come a long way back from the dark period in March and April, we have a long way to go up," Zandi told Alison Kosik on the CNN Business digital live show Markets Now.

Looking at it state-by-state, Hawaii is still struggling the most in its recovery due to its reliance on the tourism industry.

We're coming up on the weekly jobless claims report again, and economists polled by Refinitiv predict 1 million people filed for first-time unemployment benefits last week.

While that would be fewer claims than in the previous week, it's worth remembering that we've only seen one week — at the start of August — with fewer than a million claims since March, when the pandemic started to take its toll on America's job market.

Continued jobless claims, which count people filing at least two weeks in a row, are expected at 14.5 million, also slightly lower than in the prior week.

These estimates do not include claims under the government's pandemic aid programs, which are in part designed to help those who cannot otherwise access regular unemployment benefits.

And benefit claims won't be the only high-octane economic report tomorrow morning: We're also getting the second estimate for how the US economy fared in the second quarter. Gross domestic product growth — the broadest measure of economic growth — is expected to be revised to a seasonally adjusted annualized rate of -32.5%, which would be a marginal improvement from the initial -32.9%.

But even with this tiny improvement, the second quarter was still the worst one on record for America's economy.

It looks like we'll get another record high from the S&P 500 and Nasdaq Composite today. The market rally keeps going and some investors worry prices are overheating.

Meanwhile, economic indicators are pointing in opposite directions. Just this week, data on July orders for durable goods blew expectations out of the water, which is a good sign for the economic recovery. But at the same time, consumer confidence fell, as the persistently high unemployment rate and the expiry of supplemental jobless benefits weighed on people's mindsets.

Investors will face the tricky task of trying to see through the fog.

At the same time, traditionally safe investments like Treasury bonds don't have very attractive returns, so there are few alternatives to getting a piece of a stock market rally.

"People are still retiring, and it’s hard to retire on a 70-basis-point-yield 10 year," Kinahan said, referring to the 0.7% yield on the US Treasury bond.

America’s banks are getting rocked by the pandemic.

Profits at the nation’s 5,066 lenders collapsed by a staggering 70% during the second quarter, according to the FDIC.

That sharp decline was driven by a toxic combination of rock-bottom interest rates and rising fears of loan defaults. Banks increased their loan loss provisions by $49.1 billion during the second quarter alone.

Big banks, including JPMorgan Chase (JPM), Citigroup (C) and Bank of America (BAC), reported sizable profit drops. Wells Fargo (WFC) posted its first loss since 2008.

Low rates are very challenging for banks because they mostly make money off the gap between interest charged on loans and paid out on deposits. That gap has almost vanished during the pandemic.

That’s why net interest margins, a key measure of bank profitability, collapsed to a record low of 2.81% during the second quarter, according to the FDIC.

The good news is that more than 94% of all banks still made money during the quarter and only one lender failed.

“Although economic stress related to the COVID-19 pandemic continued to affect bank earnings, the industry has remained a source of strength for the economy,” FDIC Chairman Jelena McWilliams said in a statement.

Investors are hungry for opportunities, which is why the stock market is near record highs. That's why prices for safer assets, such as US Treasuries, have come down. And as bond prices decrease, yields increase.

Government bond yields dived earlier in the year, but seem to have bucked the trend for now. The only question is whether this new trend will stick.

Tighter monetary policy, meaning higher interest rates, would push bond yields up.

Officials from the Federal Reserve and other central banks are meeting -- virtually -- in Jackson Hole this week. Powell will give a speech tomorrow morning. But the Fed slashed interest rates to near zero in March and has hinted that rates will stay low for as long as the economy needs them to.

Another way to explain rising yields doesn't even go as far as thinking about future monetary policy. Instead, "investors are just booking profit and as soon as priced become a little cheap again, they will step in to buy the dip as they have done so for many years now," Razaqzada said.

Airbnb is the latest company to signal that it is bracing for a long pandemic, telling employees they can work from home through next summer even if their offices reopen before then. 

The company said in a blog post that it wants to give its workers “flexibility and choice.”

Last week, Airbnb announced it had submitted confidential paperwork with the US Securities and Exchange Commission for an initial public offering.

In an interview with Politico Wednesday morning, White House Chief of Staff Mark Meadows said President Donald Trump is considering executive action to give airlines financial assistance.

American Airlines (AAL) said Tuesday that it would be forced to lay off or involuntarily furlough 19,000 employees as of October 1 unless the airline industry gets more help from Congress.

Wall Street opened mostly in the green on Wednesday, with both the S&P 500 and the Nasdaq Composite yet again on track for record highs. While the Dow is also edging closer to its February all-time high, it still has more than 1,000 points to go.

Durable goods orders unexpectedly jumped in July, which boosted investor hopes for the economic recovery in the current, third quarter of the year.