The Stock Market Risk Of Lifting Lockdown Restrictions

President Trump is hoping to have the lockdown end by Easter. This is while the number of Coronavirus cases hasn't slowed in the US and globally. The sooner countries stick to a lockdown the sooner we can see an end to this pandemic. Lifting it for short-term economic benefits probably causes much more risk to markets (NYSEARCA:SPY), (Nasdaq:QQQ).

Ease Restrictions By Easter

President Trump said,

"We’re opening up this incredible country. Because we have to do that. I would love to have it open by Easter."

That's in about three weeks.

Here's his tweet,

But the number of new Coronavirus cases is showing no signs of slowdown in the US and around the globe.

Opening up the country to "business as usual" gives this virus more ability to spread. Serious lockdown is needed to stem the spread before we can get back to "business as usual."

Here's the global numbers.

Here's the numbers. On bigger numbers yesterday accelerated.

Here's the US.

The rate of change each day in the US is around 30% growth each day.

The idea to open the country up for business would be a huge risk pushing out the ability to stamp out this virus.

Took Wuhan Two Months To Think About Easing Lockdown

The government is starting to lift lockdown restrictions in Wuhan. It took two months officially but really more from the onset. They plan to start reducing restrictions this week with the intention to remove restrictions by April 8.

This takes time.

China and Wuhan made the hard choices to lockdown to make sure they stop the spread. Removing restrictions too soon before they saw the virus stop would have been a huge risk. But that's what the US is considering.

Ramifications

In the US there appears to be too much focus on the economic impact.

Taking the "tough medicine" to lock down the economy will be a bigger near-term economic hit. But then it passes and people can get back to life as normal sooner.

If President Trump decides to open up the economy again for business the clear risk is that the virus has an easier path to spread risking more people. In the end it creates a bigger economic risk and a bigger lockdown potentially required thereafter.

Outcry

There could be social ramifications if the country opens for business as usual.

I recommend you skim through the comments of that tweet above.

Above is just the first few but people are not happy.

This decision could open the country up to civil unrest as well which is another risk to life, business and stocks.

The Market

We wrote yesterday that there's still risk to markets. The recovery is predicated on the number of virus cases peaking, slowing and halting. Without it business and demand can't possibly get back on track.

This is probably the biggest decision of the Trump presidency with huge ramifications for health and the economy.

Not being tough on a lockdown opens the economy up to much more tail risk and the stock market to much more downside risk.

If anything, until the US gets much more aggressive in locking things down, there's risk to life, health and (since we're in a stock market forum) stocks.