Someone just asked me why the market isn't up more in the face of the debt deal that's been reached. Let me offer four reasons.
First, we don't know if a deal's been reached yet. What happens if House Majority Leader Eric Cantor says he can't live with the deal and tells House Speaker John Boehner that Boehner's out if he brings the compromise to the floor? What happens if Boehner says that his conscience dictates that he has to change his mind and go against the deal?
Second, we have to deal with earnings, and while they were largely good today, the numbers from Stanley Black & Decker (SWK) took our collective breath away and drove down many industrial companies, even as the weakness was in its security division and not in its hand tools line. Don't forget how much the government shutdown has hurt outfits like Dell (DELL) and Cisco (CSCO), both of which sell a huge amount of equipment to the government.
Third, once we get through this morass we are going to start hearing about the Fed no longer needing to buy back a lot of bonds, in part because the main reason it didn't taper was because Chairman Ben Bernanke saw this disaster in Washington coming. The reasoning is he feared he would need the mandate to buy all the bonds that could be sold by companies that couldn't own them if the U.S. defaulted.
Finally, Tuesday's sell-off snapped a four-day win streak. The market had gone up on the backs of buyers who smelled a deal even if there wasn't one initially. They were right and now they are taking profits. Business as usual.