Assessing the deal—and the damage done

Getty Images

Where do we go from here?

Traders are now trying to assess how much damage has been done to consumer confidence. The Federal Reserve, in its Beige Book survey out today, noted concern that the government shutdown might dampen consumer spending, and that manufacturers were worried customer confidence might take a hit.

There is considerable concern that reliving the entire debt and government spending issue in January—which is what this deal will entail—will cause some to hold back on Christmas spending, particularly those who may rely on tax refunds in January to pay those bills.

(Read more: Bulls party on, but market could see post-DC hangover)

One thing's for sure: We will see fourth quarter earnings estimates come down in the next three weeks. The issue is, how much? Right now Q4 estimates are high. We started the month with expectations that Q4 S&P 500 earnings would be up 10 percent year-over-year; today, it is down to 9.2 percent.

US reputation damaged: Pro

It will come down more. A typical path would bring it down to 4 or 5 percent. But this may not be typical. If it goes to zero, that will be immediately noticed and stocks will drop.

I do anticipate that markets will have a tougher time as companies give guidance in the next few weeks.

"I'm dying to buy stocks as they dip in the next few weeks," one veteran hedge fund trader told me today. Why? In years when the S&P 500 has been up strongly (it's up 20 percent so far this year), the last two months have almost always been up.

Here's my two cents: This is it? All this drama for ... the status quo?

Don't get me wrong. I'm delighted that there is an agreement. Really. But let's look at what this deal entails:

1) Reopen the government through Jan. 15;

2) Lift the debt ceiling until Feb. 7;

3) Set up a committee to hammer out broader budget issues, with a Dec. 13 deadline.

This is the status quo, no? There's no agreement to reduce spending, or allow the additional sequester cuts slated to come online in January go into effect. Nothing.

This is exactly what Fitch warned about last night when it put U.S. credit rating on negative watch. Here's the key sentence: "The outcome of a subsequent review of the ratings would take into account the manner and duration of the agreement and the perceived risk of a similar episode occurring in the future."

(Read more: Fitch's ominous US warning; earnings show shutdown strain)

What is the "manner and duration" of the current agreement? The duration is three months. That is short-term.

What is "the perceived risk of a similar episode occurring in the future?" A fair observer would say the risk of a similar episode occurring is pretty darn high.

In other words, Fitch will likely view this deal as changing nothing, and it may even greatly increase the probability of an actual downgrade. Unless, of course, something substantive comes out of the debt negotiations.

By CNBC's Bob Pisani.