she will announce her decision in a few hours on the tax bill but good progress being made. this is a few moments ago. thatof the provisions susan collins was holding out for are now in the bill. shery: that was about the salt tax the reduction, the state and local tax reductions. susan collins wanted them. and a cap in the property taxes and the senate bill could include that. it may be included. holdingllins has been out because you want separate legislation to support individual health care mandate. vonnie: of the eight senators we did not know, five we knew change their mind, three have

moved and we do not know about bob corker and jeff flake. they are not really needed. if sin -- if susan collins comes on, it is a 50-50 split and mike pence will be the tiebreaker. shery: we have heard from ron johnson who was a guest. towho is a yes, he wants expand tax credits for pastor businesses and james lankford, he had concerns about the size of the deficit. he is on board and says he will vote yes. if senator bob corker and jeff flake and susan collins announce a decision -- expected to announce a decision in a few hours. vonnie: amazing it comes down to susan collins. on the health care debate. it was down to her and john mccain who was the ultimate decider. the second time for susan collins. that is not the only news.

doolittleto abigail for the sharp market reaction this past 1.5 hours. >> a risk off reaction to the news that michael flynn has pleaded guilty, greed to cooperate in the pressure probe -- pressure probe -- russia probe. abc news says he may be willing to testify against donald trump that donald trump asked him. s&p 500 and nasdaq all strictly lower but well off of the lows, when the first news broke come all three averages were down well more than 1% and on facebook the workstations may. dow and s&p 500 now that helen -- look at the russell 2000, down 1.7%. on pace for its worst day since may. weekly declines for the russell 2000. a weekly decline for the nasdaq

and the bottom line is there is a bearish reaction for stocks to the news. the uncertainty, what does it mean and what our future implications, could president trump the impeached? could this but the united states in a tale set in -- tailspin? action is moderating but lots of uncertainty. let's look at the s&p 500. this is 2622. the blue lines represent a 1% or daily moved to the s&p 500 and the yellow line is about a 1% move up and below is a 1% move down. earlier, the first 1% move down since august. if it happened, the fifth 1% or greater decline of the year. we will be watching to see if that happens. when we look at the s&p 500, beneath the surface, this is a great way to see what is happening sector wise. a lot of rd.

ed. energy is the only sector higher. up.and gas are industrial's down more than 1% and tech down more than 1%. a tech selloff on wednesday. investors, the smart early money onto something, perhaps this was a piece of it. relative to the industrials, defense names down here in boeing, lockheed martin. iconic names for the u.s. down in a big way. ge, 3m also sharply lower. confirming the idea that this is truly a risk off day, we also have a flight to safety. forhaven assets, a big bid them with the 10 year yield down six basis points represented in green. rallying against the

dollar and gold is rallying. up 17% on the day. now at 18.6%. relatively high, speaking to the volatility and uncertainty investors are feeling around the event. how will they digest it and what does it mean for the markets going ahead? vonnie: we have breaking news. shery: senators approved the tax bill. jeff flake is a yes on the senate tax bill. we had heard from mitch mcconnell that republicans have the votes to pass the tax overhaul. the latest senator is jeff flake. doesuestion is -- where senator susan collins sounds -- stand? we are now hearing that jeff flake is a yes and james lankford is a yes, ron johnson is a yes. susan collins, bob corker?

>> those are the last two senators who have not announced or made clear they will vote yes. the if they vote no, republicans will have 50 votes, whether the vote is today or late tonight. as mitch mcconnell made clear, they are appear to have the votes. they are still trying to win over senator cowan's and they make concessions to her, including -- susan collins and they make concessions to her, including the concession for property taxes. bob corker seems less likely. they have the votes. vonnie: why bother giving her any more if it is not something that would attract support in the house during the reconciliation process? why give susan collins anymore, they have the votes? >> i guess they want a cushion. it would help to have 51 and you

do not have to call the vice president. eating the $10,000 a sentient is important for a few house republicans who will hold the deciding vote in a goes back to the house in conference. it is a win-win situation for them. they will have to find the money somewhere. be final stretch appeared to the battle between republicans who care about keeping the deficit down and those who are not worried about it and just want tax cuts. deficit hawks have lost big-time . $1.5 trillion in red ink in the first decade and after that, some sunsets republican leaders say will not sunset, and provisions will not expire. according to them. the hope is to continue this and the deficit will rise substantially. raiser theie revenue appealing the obamacare individual mandate and what would that mean for the vote on susan collins? >> senator collins has asked for

commitments on other pieces of legislation to stabilize the insurance market, most notably the alexander murray bill that make sure cost-sharing production -- payments are made to insurance companies who have ofen a thicker group patients to keep their costs and premiums down. she has secured commitments on that front that will be added to some must have legislation before the end of the year, the government funding bill that will have to get done next month to prevent a shutdown. she seems positive on that front. vonnie: ramifications or reverberations around capitol hill about what we just learned about michael flynn? >> a number of statements coming in from democrats who are shocked and want more answers. flynn is the second person in the president's orbit to plead guilty as part of the russia investigations. how hard does it go and why are

so many people in the president orbit lying to the fbi? who are the bigger fish? those are questions people are asking. shery: our national political resort -- correspondent on capitol hill. vonnie: michael flynn has agreed to cooperate with prosecutors in the pressure probe as he pleaded guilty -- pressure probe as he pleaded guilty to line to federal agents. that i recognize the actions i acknowledged in court were wrong and through my faith in god and working to set things right, my guilty plate to cooperate with the special counsel reflected a decision i made in the best interest in my family and our country and i accept responsibility for my actions. here to talk about the development is alan canceling her -- a member of the house foreign affairs committee. thank you for joining us. your immediate reaction to the

idea that there is a potential lying to the office of the presidency? >> it is big news. it is tough to surmise where this goes from here. this is news we are all just getting and he has admitted to lying to the fbi. michael flynn, i admire his service to the country but i was always concerned he was appointed early on that there were some issues. same with paul manafort. both are under some kind of indictment and a plea deal. it will be interesting to see where this goes, long-term. we are hearing word that he may testify to the russia issue. was it just, reach out to the russians because we may have the plummeted we need to do? or something else -- diplomacy we need to do? or something else? we need to be careful before we jump steps. shery: what sort of ammunition does this at the robert

mueller's investigation? >> i have always said that the investigation should go forward and we should get answers in a system where we hold all elected officials accountable. we need answers to what happened. part of the problem with a special counsel investigation is we do not know everything that is going on. we have to be patient and let the process take place. when we have bits of information that come out like today with general flynn, it is newsworthy and we can play the what if game, but special counsel mueller is doing his job and we will get answers when all is said and done. shery: what do you want to learn? >> i want to know the truth. i like the policies of president trump. shery: what does it take to get to the truth? >> the special investigation to continue. he seems like he is doing that. he is finding out what all went on. that is what the american people want, americans, republicans,

democrats. in every play-by-play, it is easy to jump to -- what does this mean? nothing wrong with speculating but we need to be patient and let the process continue and we would get answers. vonnie: transition officials told michael flynn what to say to russian contacts and to find out how the security council of the united nations would vote, what would that make you say? what kind of leadership would that be for our country? >> i hesitate to get into the what if game. vonnie: we do know this. i do not know, it is breaking news, he will testify but i do not know the details. regardless, what i do not know is -- is it reach out to the russians? when we are president, we will need to do diplomacy in the

middle east. the russians are trying to destroy eastern europe and rebuild the empire. a president and diplomacy has a right to reach out to grab a seat and was it that or something else? we do not know that yet. vonnie: you would make a major distinction, if it was a casual remark where the president said, asking them not to escalate things if we impose sanctions or if we continue sanctions? that would not be a major deal to you? >> without knowing the details, it is tough to tell. even a president-elect has a right to reach out, not to violate the current president as president obama was in an president donald trump was president-elect, do not usurp american foreign policy during the time. to reach out and say, president trump is sworn in, maybe we can then work together on this issue, i disagree with that because you cannot trust the

russians. however, those are details we need. we do not know that yet. vonnie: speaking of matters of there is looks like questions over current secretary of state and whether he will stay in that position. what would you make of a change in that particular position right now, if one were to come? >> i like rex tillerson and think he has been a good secretary of state, it is a combo get a world and he has done as good of a job as any secretary of state could. i also like mike pompeo. we have talked, when he was in the house, about foreign policy. if this is it, we do not know, that is the speculation. would be ae pompeo fantastic secretary of state as i know his foreign-policy and knows he loves foreign-policy related issues and would be phenomenal, if that is true. ofry: the repercussions michael flynn's case, what does

it mean for jeff sessions who is also accused of lying about his contacts with russian officials? >> i do not know. i do not know what it means, ultimately. there is a lot of hunger to say it is fine to speculate. is incumbent on me and others to not jump to conclusions and let the process play out. i know we want answers now. we will get answers someday. as somebody who has to take this seriously, that is where i am. shery: thank you for your time. we will bring you all the latest developments as they happen. vonnie: the president was going to meet with the libyan prime minister but there is now not going to be cameras. there is typically cameras.

longer and reporters no will be in the room. news, theybreaking are teaming up with their brazilian partners to compete for petrobras national task pipeline network, a $6 billion offering. shery: now let's get to the first word news with mark crumpton. >> as we have been reporting, the former u.s. national security advisor michael flynn pleaded guilty to lying to federal agents. speaking in court as part of his agreement, he said the donald trump campaign team asked him to make contacts with russians and that he told the incoming administration what he was doing. a senioritted calling official from the transition team for guidance before talking to the russian ambassador to the u.s. and reported back to the transition team after the call. a white house attorney says nothing about the guilty play,

says it does not implicate anyone other than flynn himself. we will have more to the story during the day. rex tillerson is dismissing reports that the white house is trying to get rid of him, calling them "laughable." he was asked about them during a photo up with the visiting libyan prime minister and multiple people say the white house is considering a plan to replace him with the cia director, mike pompeo. the state department said rex tillerson rep -- will remain on the job. the u.s. ambassador to the u.k. ansys theresa may and donald trump have a good relationship this by the dispute over the president's tweets. he told us that no date has been set for the president to visit the u.k. according to some, there were tentative plans for him to go to the u.k. but the trip is now off. that's prosecutors say an -- turkish prosecutors

say not topsy of the bodily of a military commander who died after swallowing a liquid after a judgeimes tribunal as had just confirmed a 20 or sentence for his role in the 1990's bosnian war. the public prosecutor's office says to croatian experts were present as observers at the autopsy. global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. this is bloomberg. a u.s. stocks taking a significant lower as rowling intensifies in washington will markets are turning sharply lower on reports that michael flynn is prepared to testify about president trump's directing his contact with russian ambassadors. john stoltzfus.

are you surprised at house with the reaction is to this news? >> not really, we expected them to respond swiftly. it looks like we are off the lows we saw earlier. it is a knee-jerk reaction. we think that the market is focused on fundamentals. economics and otherwise. vonnie: interesting to see a major drop, the tax rally just went away. shery: this is my the question -- does this coming on friday, the day of the gop senate vote on the tax plan, disrupt that effort? how can senator get together without any distraction and work out details of the bill? what does this do to the progress of that? vonnie: it seems like they have the votes. another headline, the repatriation rate will be at 7% and 14% in the senate tax plan

according to ron johnson. 7% and 14%, for multinational companies, what would that bring back to the united states? not asking for a figure but does it sound like a fair deal? >> the main thing is that it is a deal on the table for them and i would expect that any type of the repatriation we would say probably of one third of what is outstanding coming back as we did during the bush administration's repatriation window. that itd you be worried would pause momentum for the tax bill when it comes to the markets? matt said it has nothing to do with donald trump? >> investors we talk to this morning before this came out said this would not have any effect. jim paulsen said that the market could even rally if president trump left office for some reason. if there is a question of what

the potential implications are, the knee-jerk response perhaps is going crazy with a risk off environment. >> we see the market participants short-term looking for an excuse to take profits. when you have technology of around 37, 30% year to date, it is right for profit taking -- 37%, 38%, year to date, it is ripe for profit taking. developments, a great morning for news. a statement from senator jeff flake in support of the tax reform bill. he mentioned he had secured a commitment on daca. a lot of social and fiscal ramifications on the bill, assuming it goes to conference and comes out in a similar fashion. what are the odds of that happening? >> i have been proponent of the got it will not happen.

ultimately, tax reform -- this is not an environment in washington where you have people willing to open up and come up with a bill that would be really ultimately fair to most sides. there are defined winners and losers in the bill being presented. we have to see what the democrats voice has to do with this before it is all over. shery: when you are advising investors, do you tell them to overlook what is happening in the markets? >> i would say watch what is happening in the markets and they are telling us, from our perspective, we have been bullish -- i have been burned bullish as a strategist since january of 2009, based on what the federal reserve -- shery: we are a long way from your target? we are almost there. where are we? shery: 24.

26.29., >> don't scare me. shery: i was looking at the dow. , we thinkt is that the market is really focused on improved fundamentals, economically, not only in the united states but also on an international basis where we have international recoveries on profits. it has been based on what central banks around the world have been doing to counter some of the dislocations caused by globalization and technology, which are the longer term cyclical secular trends. the political stuff most certainly has intraday importance to the market to short-term players. in terms of what does it do to the economy, it has its own mind. vonnie: perhaps, but corporations -- if we are getting this as 7% and 40% repatriation right in the

corporate tax rate is going to around 20% and a pass-through rate will be around 23%, only current figures, that may change. that changes the face of corporate america, even if it does not create growth, it changes how corporations do their day-to-day work. >> they can buy back more shares. with repatriation, the big cash holders in cash overseas are the big tech companies, oracle, apple, ibm. they have already brought that money back to the country by way of the corporate bond market. they have been selling bonds to buy back their shares. to the extent they bring it back , you have to wonder, they are getting 2%, 3% rates on the bonds, a higher tax rate to repatriate the cash. you have to wonder how much will transform the corporate landscape. i wanted to respond to something you said that is interesting, you said that you do not think the tax plan will pass or have that big of an effect.

that is not what all investors are thinking. by michael f j.p. morgan asset management said that if the tax plan goes through as proposed with fuzziness around the edges, he expects the fed to respond with four rate hikes next year, the 10 year yield to shoot past 3% with a real inflation. that changes the picture quite a bit. there is some speculation that is being built into the market that this will have an effect. >> another side of the trade. we have a good chance of seeing three hikes next year. most of it comes from an improved economy that we are experiencing. and what we are being fed by international when we do a lot of trades. i do not think it will be as disruptive as some people think. us.y: thank you for joining we are running out of time.

john is the chief market strategist of oppenheimer. let's get a check of the markets. the s&p 500 falling 7/10 of 1% and the dow also down .5% and the nasdaq down 1%. big news about michael flynn and what he is telling congress about connections to russia. plenty more coming up on that and tax reform. the senate trying to pass the tax bill. we are hearing that the 50 votes are there. we will give you the latest as we get them. this is bloomberg. ♪

♪ vonnie: live from bloomberg world headquarters, vonnie quinn. dan: this is bloomberg market. welcome viewers and listeners on bloomberg television and bloomberg radio who are used to seeing adhering "real yield" but it will be on this weekend on bloomberg television. we have the latest concerning the tax overhaul, and also headlines about michael flynn, former national security adviser admitting the lying to the fbi and saying the trump team is russia talks. a lot going on this afternoon. abigail doolittle is here now. take us