The headlines make the situation seem like a curiosity.

For investors, Wall Street analysts, and even some financial journalists, the reality of the damage to the economy, several weeks after the initial round of fiscal support expired, may indeed seem like a spectacle.

But it’s not that way for millions of Americans out of work or struggling to pay the rent or buy food in the wake of this year’s coronavirus pandemic.

It may not need saying that the longer the economy goes without another financial aid package, the worse the situation may become. But some analysts increasingly think it will also soon start to make an impact where it cannot be ignored: in the financial markets.

“Stimulus is the wrong word for this,” said David Rosenberg, a long-time strategist now running his own firm, Rosenberg Research. “This not classic Keynesian stimulus. It’s a lifeline to get us through. The stimulus has become what the Phase One Trade deal was last year.”

Week after week, roughly 800,000 Americans file for first-time jobless benefits, the springtime Congressional stimulus money has run out, and things are generally growing more dire for businesses and households, Rosenberg thinks. “If they don’t pass some sort of bill quickly, how many businesses will go under, how many missed payments will we see on rent, debt service, and utilities? The next few months are really critical. I’m quite amazed that there’s quibbling over a hundred billion dollars here and there with so much at stake.”

See: Yes, the U.S. economy really does need more fiscal stimulus – and the stock market knows it

It’s important to note that Rosenberg and other analysts do believe that some sort of stimulus package will be enacted eventually. And so does the stock market, which has been gravitating toward areas investors expect to benefit under Democratic party leadership after the November elections, such as clean energy
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.

But waiting until January is too late, many think. “We’re really in no-man’s land now,” Rosenberg said. “If we don’t get a fiscal bill I think we could easily swing to a contraction in Q4.”

In a research note Thursday, Oxford Economics said that “a delay would have a meaningful impact on the economy and could derail the earnings upgrade cycle.”

“Our economists estimate that the expiry of additional unemployment benefits, coupled with a reduction in aid to businesses and state and local governments would reduce GDP by 1.5%,” the Oxford economists wrote. “This would see US growth approach stall speed of around 1% annualized and would likely derail the nascent earnings recovery. With equity valuations elevated this is a key downside risk for the market.”

To be sure, some analysts have a slightly different view. In a research note Thursday, Nancy Davis, founder of Quadratic Capital and portfolio manager of the Quadratic Interest Rate Volatility and Inflation Hedge exchange-traded fund
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 , wrote, “I feel like the market is Luke Skywalker, confidently proclaiming that he’s not afraid. And I’m Yoda leaning in and quietly whispering, ‘You will be.’”

But the fear investors should be preparing for is with inflation, not a stalling economy, Davis thinks. “We’ve been through a profound economic shock with the virus, but everything every policy-making body in the US is doing is inflationary. It is designed to be inflationary.”

But if market participants realize there’s no hope of a deal until after the election, Rosenberg thinks the market reaction could be abrupt. “I think that we already have the template from the last hour of trading on Tuesday and the huge bounce back on Wednesday,” he said. “The market swung violently lower when Trump broke off talks and then we rallied the same amount when the talks were back on.”

What about other asset classes? “Treasury yields
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will rally hard, we will get a bull flattener in the yield curve and a classic move toward safety,” Rosenberg said.

“Stimulus now means a weaker dollar
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and no stimulus means a stronger dollar because it’s risk off,” Rosenberg added. “Lower interest rates will be bad news for the financials and bank stocks. The most cyclical stocks will suffer the most. The sectors that will do the best would be utilities and consumer staples and anything in big tech having utility-like characteristics. “

U.S. stocks rose Friday to clinch weekly gains as investors monitored the prospects for another round of fiscal stimulus from Congress. The S&P 500 SPX, 0.88% rose 0.9% to 3,477.13. The Dow Jones Industrial Average DJIA, 0.57% advanced 161.39 points, or 0.6%, to 28,586.90, based on preliminary numbers. The Nasdaq Composite COMP, 1.39%  gained 1.4% to end at 11,579.94.

For the week, the S&P 500 was up 3.8%, the Dow rose 3.3%, and the Nasdaq climbed 4.6%. The S&P 500 and Nasdaq enjoyed their best week since July, while the Dow had its biggest weekly gain since August.

Next week brings a heavy schedule of U.S. economic data, including the consumer price index, several readings on manufacturing, including the Federal Reserve’s industrial production report, and retail sales figures for September.

Read next: ‘Anything can happen:’ Why the hottest investing trend is playing it safe

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