Stock and index ETFs continued their fall on Friday, amid ongoing uncertainty that fiscal stimulus will occur. The Dow Jones Industrial Average and S&P 500 are headed for their first weekly loss in three weeks as stock futures rollover to the next contract.

The Dow Jones shed 0.26% on Friday, while the S&P 500 lost 0.58% and the Nasdaq Composite fell 0.73%. Both the Dow and S&P 500 are headed for a three-day losing streak, while the Nasdaq had a reprieve on Thursday, buoyed by tech stocks like Apple.

Major stock ETFs are struggling as well on Friday, as stimulus remains. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are all declining just after 11:30AM EST.

On the week, the Dow and S&P 500 have lost 0.7% and 0.8%, respectively. The Nasdaq entered Friday’s session down 0.5% week to date. This follows after weeks of gains, fueled by vaccine optimism and hopes for fiscal stimulus prior to the end of the year.

Market Optimism Beginning to Turn

The coronavirus relief negotiations continued to lag, as lawmakers are battling to pass a bill before the end of 2020, but are having trouble agreeing about a number of factors related to the stimulus.

“The tenor of headlines out of Capitol Hill around stimulus sounded a bit better than Mon-Wed but there’s still no sign of a breakthrough,” Adam Crisafulli, founder of Vital Knowledge, said in a note.

The House has passed a one-week federal spending extension to prevent a shutdown through Dec. 18, and to permit further negotiations.

“The policy issues in Washington are really what’s driving the market,” said Donald Calcagni, chief investment officer with Mercer Advisors. “There’s still a lingering sense of anxiety that the election is not settled yet. The lawsuit led by Texas, I think creates some anxiety. Market momentum looks like it’s dissipated and there’s more downside risk. We need some finality to this. The challenge is that the president probably won’t concede. I think we’re in a weird place between now and the inauguration.”

“There are short-term headwinds, including the shutdowns, case counts skyrocketing, and 3,000 Americans dying every day,” Calcagni added. “It will be hard for Congress to agree to anything before the Georgia run-off. I’m not bullish between now and early January. The market is ripe for correction, and I see possibly 7-10% downside if we don’t get more policy leadership around these issues.”

In U.S. economic reports, the producer-price index climbed 0.1% last month, the government said Friday, matching the MarketWatch forecast. However, the rise in November reflected the smallest increase in seven months, underscoring the lack of inflationary pressure in an economy still struggling to emerge from the ravages of the coronavirus pandemic.

However, some market participants said that other measures of inflation, including the Commodity Research Bureau Index, or CRB, are pointing to higher prices.

“Bottom line, while the November PPI numbers look benign in the aggregate, the CRB commodity index was up 11% in the month alone so expect that to filter thru in the months to come and as seen in the pipeline stage of inflation,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Investors were also concerned about the weekly jobless claims number that popped to 853,000 last week, reaching the highest total since Sept. 19, as new lockdown restrictions are affecting businesses and coronavirus cases continue to spike.

While most of the market was bathed in red on Friday, Disney was one bright spot, up over 13.2%. On Thursday, the company said its Disney+ service has 86.8 million subscribers and expects have between 230 million to 260 million subscribers by 2024. The move may be helping to boost the iShares Evolved U.S. Media and Entertainment ETF (IEME), which is positive on the day despite losses elsewhere in the stock market.

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