President Trump’s chief economic adviser Larry Kudlow said Sunday that the U.S. economy could see a historically high growth rate in 2021 despite the current economic contraction caused by the coronavirus.
“President Trump cut taxes and regulations for middle-income folks, better trade deals, boosting the energy system, that worked. We had terrific growth in earlier years, even the beginning of this year,” Kudlow told Sunday Morning Futures. “We will build on those incentives so that coming off of this pandemic, we could have one of the greatest economic growth rates in American history in 2021 next year.”
Kudlow insisted that the U.S. could see a third-quarter economic growth rate as high as 20%.
“I want to quote the Congressional Budget Office, as well as a bunch of private forecasters and The Wall Street Journal forecasting survey,” Kudlow said. “They’re looking for a substantial rebound of say 17 to 20% in the second half of the year beginning in the third quarter.”
Oil Might Not Even Float on Water Right Now
Oil prices fell in early trade on Monday, paring last week’s gains, on worries the global oil glut may persist as U.S.-China trade tensions continue. This could hold back an economic recovery even as coronavirus pandemic lockdowns start to ease.
The market found support last week as major oil producers were set to begin cutting production on May 1, while the top two U.S. companies, Exxon Mobil Corp and Chevron Corp, also said they would decrease output by 400,000 barrels per day this quarter.
The output cuts combined with the loosening of business restrictions in some U.S. states and cities around the world were expected to ease the global fuel glut and pressure on storage tanks, which helped to drive prices up last week.
U.S drillers cut 53 oil rigs in the week to May 1, bringing the total count down to 325, the lowest since June 2016.
US Markets
U.S. stock-index futures fell sharply in thin trading Sunday evening as investors contended with state reopenings. Cooped-up citizens are eager to gather as spring has brought warmer weather.
More than two dozen states have begun to allow select businesses to open or have announced plans to do so in May, despite climbing cases, albeit at a slower pace, of novel cases of coronavirus.
Futures of the Dow Jones Industrial Average DJIA, -2.55% were off 288 points, or 1.2%, at 23,331, those for the S&P 500 indexSPX, -2.80% declined 31.45 points, or 1%, to 2,790.25, while Nasdaq-100 futures retreated 88.25 points, or 1%, to 8,629.75.
Meanwhile, investors may want to pay close attention to the airline industry after Warren Buffett held his annual shareholder meeting on Saturday. He announced that Berkshire Hathaway sold all of its stake in major airlines.