Jerome Powell, SoftBank, Walmart and Penney - 5 Things You Must Know Monday

Stock futures are posting solid gains; Federal Reserve Chairman Jerome Powell expresses optimism the country can begin to rebound in the second half of 2020; Jack Ma resigns from SoftBank's board.
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Here are five things you must know for Monday, May 18:

1. -- Stock Futures Point Sharply Higher

Stock futures were posting solid gains Monday after investors cheered the reopening of the U.S. economy and after Federal Reserve Chairman Jerome Powell expressed optimism the country can begin to rebound in the second half of 2020.

Stock futures also were getting a lift from positive study results on Moderna's  (MRNA) - Get Report coronavirus vaccine candidate.

Contracts linked to the Dow Jones Industrial Average jumped 477 points, futures for the S&P 500 rose 55 points and Nasdaq futures gained 145 points.

California Gov. Gavin Newsom said about 75% of the state's economy had reopened, while Apple  (AAPL) - Get Report said more than 25 stores in the U.S. and 12 stores in Canada would reopen this week after being forced to close by the coronavirus pandemic.

Paul Chew, head of research at Phillip Securities in Singapore, told The Wall Street Journal that as economies emerge from lockdowns, stocks would tend to creep higher. He added that a stronger rally would come only when investors believed there was a decreased risk of a big second wave of infections.

Stocks on Friday closed out their biggest weekly loss in nearly two months. The S&P 500 fell 2.3% for the week.

2. -- Fed Chief Sees Gradual U.S. Recovery

Federal Reserve Chairman Jerome Powell said the United States can expect a gradual and likely bumpy recovery as lockdowns are lifted during the coronavirus pandemic but added a full-blown sequel to the Great Depression isn't likely.

"The big thing we have to avoid," said Powell, in an interview with CBS News' "60 Minutes" on Sunday, "is a second wave of the virus."

The Fed chief said the recovery process could run through to the end of 2021 - "it'll be a while before we really feel well recovered," he said - and added that the only path to a sure recovery will be a vaccine.

“For the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine,” he said.

The U.S., according to Johns Hopkins University, leads the world in the number of coronavirus cases, at 1,486,752, and deaths at 89,564.

Assuming the U.S. can somehow escape a second wave of the coronavirus, it will see the economy recover steadily through the second half of 2020 after a potential peak jobless rate of up to 25% and dramatic shrinkage of gross domestic product, the Fed chairman said in the interview.

3. -- Walmart, Home Depot, Nvidia Report Earnings This Week

The earnings calendar this week includes reports from Walmart  (WMT) - Get Report, Home Depot  (HD) - Get Report, Kohl's  (KSS) - Get Report, Lowe's  (LOW) - Get Report, Target  (TGT) - Get Report, Nvidia  (NVDA) - Get Report, TJX Cos.  (TJX) - Get Report, Best Buy  (BBY) - Get Report, Nordstrom  (JWN) - Get Report, Palo Alto Networks  (PANW) - Get Report, Alibaba  (BABA) - Get Report and Deere  (DE) - Get Report

Nvidia and TJX are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

Highlights of the economic calendar this week include Housing Starts on Tuesday, minutes of the last meeting of the Federal Open Market Committee on Wednesday, and Jobless Claims and the Philadelphia Fed Business Outlook Survey on Thursday.

4. -- SoftBank Posts Massive Loss, Jack Ma Resigns From Board

SoftBank, the Japanese tech conglomerate, posted an annual operating loss of $13 billion and said it would withhold its dividend as its Vision Fund lost nearly $18 billion after writing down the value of investments in WeWork and Uber Technologies.

The loss is the worst in the company’s 39-year history, according to Bloomberg.

SoftBank also announced the departure of Alibaba founder Jack Ma from its board after 13 years.

The company also said it would buy back nearly $5 billion of its own stock by March 2021. The repurchase is similar in size to one it  announced in mid-March.

5. -- J.C. Penney Files for Bankruptcy

J.C. Penney  (JCP) - Get Report formally filed for chapter 11 bankruptcy protection on Friday, becoming the third major U.S. retailer to fall victim to the coronavirus pandemic and ongoing economic shutdown.

The bankruptcy filing, which was announced after the stock markets closed, ended a tumultuous two months for the retailer, which was already struggling under more than $3.8 billion in debt when it shuttered its portfolio of 850 stores and head office in mid-March.

J.C. Penney, in business for 118 years,  skipped two debt payments in the last month, though it said it made a $17 million interest payment on a loan, avoiding default. The company last week reportedly was locking in $450 million in financing to navigate chapter 11.