US debt deal: No deal at all as status quo remains

Senate Majority Leader Harry Reid (D-NV) walks through the Capitol building on October 14, 2013 in Washington, DC
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This is it? This is ? Think about this: all of this drama and fighting has boiled down to: maintaining the status quo. The government will reopen...but only through January 15th. The debt ceiling will be raised...but only until mid-February. And the "budget negotiations" that are supposed to occur? The issue is whether sequester cuts that are supposed to take effect in January will happen or not (most likely the latter).

In other words, nada. The net effect of this is the government opens, borrowing goes on, and the sequester cuts will likely be minimal, if at all. The budget will likely be the same next year as it is this year.

So nothing changes, and we have another fight in a few months.

That's the good news. The bad news is that a deal could still be derailed in the House. Even if it's not derailed, we are still set up for another round of anxiety and uncertainty in January, for individuals and for businesses.

Let me give you one simple example. Remember all the anxiety last January because tax refunds weren't sent out? Remember Wal-Mart and others making comments that sales had dropped because the refunds were delayed?

That will likely happen again. A viewer in the retail business wrote to me last night, saying that a deal to open the government only through January 15th and the debt ceiling to mid-February would be "horrible" for retail sales: "In order for consumer to spend for the holiday, they usually rely on that tax refund [at the end of] January to pay for purchases, and if the refund not there, they won't spend as much," one owner of a group of retail stores told me this morning.

"They're not stupid anymore, the customer remembers last year," he said, referring to all the delays in refund checks after the fiscal cliff fiasco. "They rely on that money, and if its imminent no deal gets done, they're not going to spend the money in December."


1) Big caps: where's the leadership? I noted yesterday that the small-cap Russell 2000 and the S&P MidCap indexes were both at historic highs. Not so with the big cap indexes: the Dow, for example, is still 2.5 percent below its September historic highs.

More worrisome, the leadership seems very narrow. For example: there were only 184 new highs on the NYSE yesterday (there's about 3,000 securities that trade at the NYSE). Still, the has gained 500 points in the last four trading days. So close to new highs, but many of the famous names aren't even close to new highs.

For example: IBM topped out in March, while McDonald's and AT&T in April. Coca-Cola and Wal-Mart followed in May, and ExxonMobil did the same in July.

Speaking of WMT: today is their investor day. They should introduce 2014 earnings estimates.

2) Get 'em out: two IPOs try to price before the budget crisis: The biggest IPO of the year set to price tonight. A Limited Partnership, which makes oil and natural gas pipelines, and Plains GP Holdings (PGAP) are looking to price 128 million shares at $22-$25, a $3 billion offering at the mid-range, which will be by far the largest IPO this year. The yield, however, is a measly 2.5 percent, which is disappointing considering many Master Limited Partnerships (MLPs) have yields north of 5 percent.

Antera (AR), an MLP, was the second largest IPO this year at half that; they raised $1.57 billion a week ago.

Another big one pricing tonight: for life science cloud-based software firm Veeva Systems (VEEV) which has raised its range from $12-14 to $16-18 and the overall deal size 31 percent.

Solar City (SCTY) Elon Musk's company, also doing a secondary.

By CNBC's Bob Pisani