meeting in warsaw for the nato summit. ourshared values, including commitments to democracy and pluralism and opportunity for all people in a globalized world , that will continue to unite all of us. that is the work that brings us here today. the world has shrunk. it is interconnected. all of you represent that interconnection. many of you are catalyzing at an accelerating it. it promises to bring , but itinary benefits also has challenges and will also evoke concern and fears. part of why this global entrepreneurship summit has been , something my heart i been so committed to is because i believe all of you represent all the upside of an interconnected world. all the optimism and hope and

that interconnected world represents. it's also important in these discussions to find ways in which we are expanding and broadening the benefits of that interconnection to more and more people. that's what so many of you are doing. we are gathered here at stanford in the heart of silicon valley, one of the great hubs of innovation and a partnership for the world. this is a place that celebrates our ability as human beings to ,iscover and learn and to build to question, to reimagine, to create new ways to connect and work with each other. it's where two guys in a garage go and launch a global company. where student projects became yahoo! and google.

those were really good student projects. [laughter] president obama: my student projects were not as good. [laughter] president obama: it's where entrepreneurs like so many of get an idea and you build a team and you work to turn it into reality and you launch products and companies and entire industries that transform the world. president obama speaking at the global leadership summit in stanford, california, talking about the european referendum yesterday. david cameron announced his resignation this morning. he stressed the special relationship between the u.s. and u.k. will continue and that the u.s. will continue to have relationships with the european union and nato. jonathan ferro has been covering this story from the beginning. n: what a day for the u.k. and for financial markets.

the dow with a 500 point loss as we head toward the close. daye already wrapped up the of epic trading after the historic vote right here in the u.k. to leave the european union. two hours left in the u.s. trading day. stocks are getting hammered following massive selloff in europe. up next, the latest reaction asm brussels and westminster the u.k. and you start the process of going their separate ways. and u.k. conservative party thinks about its next leader. focus on the u.s. market. closes coming up in less than two hours. y: let's look at the snapshot of where we stand right now. it is red across the board. let me give you the numbers in comparison to where we were at our session lows. the dow down by 500 point.

the s&p 500 right now is down by 3%. we were down by 68 points, now about 62. we are off our session lows, but not by much. we were appalling like a rock, down 3% right here. barely any lift, pretty much know lifted all to speak up on the s&p. nine out of 10 sectors here are in strong negative territory. financials down the most, 4.7% here. this is the biggest fall since november of 2011. materials down by 11%. same story for information technology. because of interest rates,

utilities are up higher on the order of about 1%. financials down 4.7%. jpmorgan down by nearly 6%. this is its lowest in the past month. citibank down 9.7% there. bank of america also down on the order of about 70% -- 7%. money managers, folks dealing with the funds out there -- invesco down 12%. this 12% drop is its biggest fall in five years wiping away $1.42 billion in just the past several hours. the action in europe has been that significant.

look at equity markets. the biggest one-day drop since 2008. the dax got hammered and bank stocks were brutalized, down by 14 percentage points. fx.markable day for down to pullrading percentage points. that's two full percentage points. if you want to see risk aversion, go to the japanese yen. dollar yen broke 100 earlier today. a significantly stronger japanese yen. a really interesting trade emerges, the spread between bonds in spanish that. -- and spanish debt. by 14. germany

by 29 basisdown points, an all-time low of 1.09% on a u.k. tenure -- 10 year. ryan chilcote is live at eu headquarters in brussels. francine lacqua and westminster. -- in westminster. eu leaders significantly concerned. no real signs of hostility between the leave campaign and eu leaders. the tension on the timing of when this process to leave the eu actually begins come any sign of when that will actually start? well, it will start on monday. the process of the soul-searching within the n'anyean union -- there is tension becauset the european union's history.

what they're really concerned about going forward is other countries within the european union leaving the eu like the u.k. has. morning, weund this heard from politicians in three different countries, the netherlands, france and italy all saying that now, their country should also have referendums on their met that membership in the eu. they don't actually have the power to bring about this referendums. -- those referendums. the attention within the european union right now is on how to preempt that, how to convince those countries that the eu is so good, there's no need to have a referendum in their country. francine the outside westminster for us. we saw some statements from various politicians.

what is going on right now, do you think? francine: the mood is very somber. a couple of people saying they voted to leave, but they were not expecting the prime minister to resign quite so abruptly and quickly. david cameron keeping a short statement, saying he will resign , opening the way for a new contest of leadership for the tory party westminster team went out and we picked up the london evening standard and i was surprised about how the debate had shifted, the tone is very neutral, it is really summer that's extremely somber. there's none of the animosity that we saw in the debate. people are under shock, try to keep a cool head. nobody knows what comes up next.

we don't know who will lead the tory party. coup may be some kind of within the labour party. david: i'm curious as to what the timetable is going forward. the notion of retribution came out that other eu members might take action against the united kingdom. ryan: there is definitely a danger of that. many countries in the lead up to brexit threaten the u.k. saying if the u.k. is going to leave, it will not get any preferential treatment after. it will not have the same privileges. the timetable is this. effectively, the entire eu is in soul-searching mode.

what was so bad that they wanted to opt out of the world's largest trading block? monday.l continue on in berlin, the german chancellor will host a number of you leaders and that will continue here in brussels. would all 28 leaders of the european union will gather. there will be a bit of a chat in the evening over dinner. david cameron will explain the british point of view. he will have to explain why he will leave it to his successors to begin the negotiations. they want to get on with it. but there's going to be a divorce, they think it should be quick. the 27 liters remaining in the remaining in the talking about how to go forward. there are real divisions within those 27 countries. it was never a monolithic body and continues to be a divided body.

you have a countries within the eu that don't even use the eight countries within the eu that don't even use the euro. we have the german chancellor saying let's make sure this is all civil. she wants to make sure they feel like they are on board because the french are now pushing for four closer financial that's pushing for closer financial integration. --: thank you for joining us jon: think you for joining us. it is a two-day process and it hasn't even started yet. mark: donald trump says there is a connection between the u.k. decision to exit the european union and president obama who visited london in april and expressed hopes that britain would stay in the eu mr. troubled told reporters in scotland that some of the votes were cast to spike the president. i was very surprised that

president obama would come over here and be so bold to tell the people overhear what to do. i think a lot of people don't like him and a lot of people --ed best mark: president obama warned that leaving the eu would put the brits at the back of the q4 ue for a u.s.q deal. germany's finance ministry indictments they're entitled his country is now a nuclear threat to be reckoned with. he told the ap that washington can expect more nuclear test and missile launches like the ones this week.

the u.s. navy has fired it commander -- the sailors were detained by iran for 15 hours. additional punishments against seven other sailors are under review. a decision will be announced next week. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. this is bloomberg. david: how will the u.s. stocks feel the pain of the brexit boat. vote?xit ♪

jon: the u.k. boats to leave the eu and markets are down dramatically with the dow down by 2.8 percent. -- the u.k. votes to leave the eu. let's get more market reaction on this historic day. joe sullivan joins us from baltimore. what changed measurably for you and for legg mason this morning : -- this morning? a long-term perspective, not a lot has changed, really. we advise our clients not to get

caught up in short-term challenges. this does not change how we work with clients in terms of like being -- taking a longer-term view. vonnie: do you have a different view of how the u.s. economy will fare because of this? of this, it ist likely because of the protracted nature of the exit, it will take a couple years to make this separation actually happen. we don't know what the outcomes of this are going to be for even longer because it's five to 10 years. in the immediate term, it will clearly be an overhang. there will be a lot of uncertainty. it will be an overhang, for sure. there is clearly going to be a growth. drag on

globally as well, it will impact that. it's going to foster the environment of lower for much longer. maybe not being said and i don't have answers to it to be honest with you, but what is interesting is who might benefit from this when we look at significant dislocations or disruptions in the marketplace, while we tend to focus on who's getting impacted from a negative standpoint, it's clear that there could be some countries and regions that could win from this. as things change in the u.k., that will imply other potentially positive effects for other regions or countries. jon: nine at 10 u.s. equity groups negative.

why is jpmorgan down 6.2% on the back of this? is it just intense risk aversion ? it is a bit of an overreaction. -- ir case, the reality is don't mean to minimize this, but with the way our company is , the impact on legg mason is fairly modest heard at least the direct impact is fairly modest. next months over the of investor confidence and how and quarters and years in terms that could impact our business, that is a pair that's a fair question. the way our stock is being impacted today, there is a -- what is thes direct impact? how much of your business is actually being directly affected by this business in the u.k. or

eu? it is harder to assess that than just one day of trading. in my view, it is a bit of an overreaction. , the dust will settle a bit and people will be able to better quantify it. operationsarding the of your day-to-day business, how much have you been invested in the u.k.? are you in there putting more money to work now? joe: there has been some discussion. we have managers across asset classes with a number of affiliates and they all have their own different approaches and theses with respect to the markets. there are some who are thinking that certainly the u.k. but also some of the impacted markets, emerging markets are getting a

fairly attractive -- it could be interesting, opportunistic. all of our managers going into this did not have a big bet one way or the other. they were all thoughtfully positioned during the day today. a lot of handholding, a lot of conversations, a lot of connecting with our managers to talk about how they view the impact of all of this. it has been a pretty turbulent day and challenging day. david: i have to assume this will signal some broader strategic shift. you have countries around the world looking inward, focusing on nationalist ideals here. but has to signal something. i think you are saying a couple of different things there. on the one hand, i agree that this vote is reflective of a

, somewhat voter disenfranchised -- what is going on in the u.s. with what's going on with the election, there the meaningful potential for a contagion, certainly in the you -- eu. governments need to understand and hear what the people are saying clearly. a significant dissatisfaction with government. whether it be slow economic growth or wage growth or immigration, there's a lot of people who feel disenfranchised. they're listening to and responding to those with a more strident view of how to solve his problems. your stock is down almost 10% on the session. you say there is no real

fundamental reason for that. you make a decision to step and personally as an individual with a significant holding in the company nsa chief executive as well? would you buy the stock back? joe: i have done that. we had a selloff and some weakness in our stock earlier in the year and i brought that i bought a significant amount of stock for my own account. we have an active share repurchase program in place. we find these to be attractive levels. i don't think there's no reason -- clearly come anytime there's this kind of turbulence and volatility in the markets, that will always impact financials. i think it is just the reaction has been overreaction. not trulyion grounded in the make up of our business. you have a wave of selling here

now. --r time, there will be some i never been afraid to buy our own stock. the company itself does have an ongoing share repurchase program. where opportunity might be -- are you looking to emerging markets? do you have an inclination of where there might be opportunity? joe: emerging markets has been under pressure for several years now. this will put them under more pressure. mother oughthere to be some opportunities to be thoughtful and selective about various emerging markets, economies and companies or countries within those. think about it, the greatest potential for long-term global growth continues to be with the emerging markets. bit of ag to be a

challenge, it will elevate interest rates and yields in those countries. is it will overreact and they will become significantly cheaper. if you are a long-term investor, emerging markets need to make some sense. important services that will be ultimately recognized in the marketplace. still ahead, the commodities close. there is oil today, down by about 5%. more "bloomberg markets" coming up. ♪ okay, ready?

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by 7.8%. -- the pound is down by 7.8%. quite a day for politics and for markets as well. i'm david gura. vonnie: and i'm vonnie quinn. ramy: we are seeing a huge pop in gold and silver off the brexit boat ramy vote. futures in settling 4.7% higher -- futures in settling 4.4% higher. we did push past the 1362 marker. ahead, bloomberg areysts that were surveyed saying this may be the very beginning. the median forecast for gold could rise even higher by as much as $100 an ounce by the end

of this year. .bout a 7.8% rise there silver also rising by 6.5%. the biggest jump since december of 2014. a high not seen since the past year and a half. let's look at commodities with energy and the bti crude. -- wti crude. 5%.e down by nearly it had been down as much as 6.8%. its worst day in the past nine months. saying across global markets, we are seeing this risk off mood reflected in the stronger dollar. corn futures are falling right now.

just a couple days since we had an 11 month high. down by 12% here. corn having its worst week in the past three years because of brexit and the weather here in the u.s. more rain than expected. thank you so much. the s&p 500 negative for the year. for months, u.k. politicians warned of the devastating economic impact of the u.k. leaves the eu. mark carney came out to ensure they are prepared. awayere will be no initial -- way our people can travel or goods and services can be sold. it will take some time for the u.k. to establish new relationships with rest of the world. some market volatility can be expected as this process unfolds, but we are well prepared for this.

ken the u.k. economy with the change?hstand we typically talk about political fragmentation across the eurozone. now, right here in the u.k.. talk to me about the economic ramifications. i still struggle to understand what the impact is outside of the confidence channel. >> we saw the pound collapsed today. the trading volumes are really thin today. there's a question about how much that's been overdone. there is an argument that if the pound is weaker, that could be a boost to the u.k. economy. importing -- this will be

negative for the u.k. but could also ring the death knell for the eu. this is more political story than an economic one. it will be bad for the u.k. and .ad for the city david: what is the recession vote?n light of this >> it is likely that it will go into recession on the backs of vote. in essence, we are in a better position than we were back when lehman happened. that comparison is very flawed. we will end up seeing further central-bank easing in the u.k. the u.k. has room to cut rates. it might become the first country to use helicopter money

to stimulate demand goo. when will that become necessary? >> if the u.k. does get pushed into recession, they will cut rates to the zero lower bound. i'm doubtful view cable cut rates in the negative territory like the ecb has done or bank of japan has done. they will cut rates to zero but after that, they could either ortart quantitative easing just to transfer money straight to households, which would be a lot more efficient and a lot less risky than negative rates. you question how much of a stimulus you will get from sterling. --lds down 30 basis points

guilds have performed stunningly throw the session. how much of a benefit is that? >> yields will increase as a risk premium for what this means for the u.k. economy. there will be a ton of contagion from that to the eu. the eu is the uk's biggest trading partner. i was looking at your twitter handle. the economic effects there are two cited. you agreed with what he had to say there. what are the potential upside's? >> the weaker currency would benefit from the exports from the u.k. the eu stands at a crossroads. either the eu will be stuck in a quagmire of disagreements for a number of years now or actually policymakers will do some real

soul-searching and figure out half of thet -- let fifth largest economy in the world turn on them. it will depend on how much sterling falls. we could see a 15% depreciation. we've already seen a 10% depreciation. that could go further. we will have to wait a couple of days to see exactly how this shapes -- shakes out in the markets. trading volumes are so incredibly thin today. the sterling effect is one that will be sustained. what is the fiscal policy response? what do you think it will be? >> now that cameron has to down,

he says he wants a new prime minister. george osborne is almost certainly out as well. we don't know who will run the next government. the new government won't just have to focus on the fiscal response mother will be infighting within the conservative party. there are three main candidates to replace cameron. she's the only one of the three that have come out on the remain side. they will have to fight within themselves. once we have some political stability, they will have to negotiate on a number of levels. we woke up to the most divided u.k. i've ever seen. the leaders will have to try to reunite society or face social unrest. jon: thank you for joining us. big moves in the markets.

let's get your headlines. mark: president obama is in palo alto, california for an entrepreneur summit. the first topic he addressed was reaction to the u.k. decision to leave the eu. president obama: just a few hours ago, i spoke with prime minister david cameron. david has been an outstanding friend and partner on the global stage. based on our conversation, i'm confident the uk's committed to an orderly transition out of the you. -- the eu. mark: the special relationship between the two nations will not change. itsident vladimir putin says is not the kremlin's position to interfere in decisions made by britain. the prime and asked her said the result had risks for the world economy and therefore the russian economy.

pope francis bringing a message of hope and solidarity to armenia. the pontiff will pray in armenia stirrer site -- genocide memorial and pray for peace during in the -- a service. the u.s. military has launched its first airstrikes against the television in afghanistan since president obama's decision to expand america's involvement against insurgents. the airstrikes began this month that they would not elaborate on their outcomes. a state of emergency has been declared in west virginia due to severe flooding. are deadseven people and there are reports of up to 500 people trapped in a shopping mall. it is probablyys the worst flooding west virginia has seen in 100 years. global news 24 hours a day,

powered by our 2600 journalists in more than 120 countries around the world. this is bloomberg. david: coming up, we are looking at currencies with mark chandler . stocks at session lows. more "bloomberg markets" coming up on bloomberg television. ♪

jon: a united kingdom which is divided down the middle as the u.k. votes to leave the eu. the market ramifications clear. the s&p 500 turning negative for the year. -70 points.

10 year yields down by 18 basis points. we trade on euro-dollar at 11119. low. trading at a 30 year vonnie: currency markets -- none more effective than the british pound. plummeting to levels not seen since 1985. other currencies got a bit of a ramming as well. we have mark chandler with us. therech intervention was today in currency markets? mark: good question. majorect only two central banks admitted to intervening. this was -- the swiss central

bank and danish central-bank. the markets he's a big price action committee big swing and think that could be intervention. marc: i think about emerging-market countries, typically intervening on a daily basis. you don't need this huge blowout moved to get that. the major central bank intervention may be more significant. doubt the japanese will intervene. what gives you that inclination? when the japanese have intervened in recent years, there was never a question of whether the intervene or not. the market had all kinds of triangulating all the evidence, more than one dealer claiming it. i'm a bit suspicious. jon: the swiss did the hard work

for us. dollar yen had a 99 handle. million fxd to a strategists about the level at which they would step in. we crossed the 100 mark. where is the pressure gauge for them? it is a misconception to think about a line in the sand. instead, what i think they are focused on is two things that is it a yen move? this is a broad risk off move. the key for the japanese is ultimately volatility. .olatility is very high now the g7 statement earlier today recognizing this orderly and volatile market is not desirable

lowers the bar for japanese intervention. up until now, i've been adamant that the bank of japan would not intervene. conditions have changed, markets are more volatile. it is not a level like 100 or 90 or 95. it is how fast we get there. if it is a slow, gradual appreciation of the yen, that is fine, acceptable. if it is volatile like this, dramatic, it will have spillover effects if they have to respond. vonnie: when does sterling ?tabilize of stillombination adjusting to the economic the camp arguing for brexit said there would not be much of an economic impact. hady come anybody that pension money tied up in the u.k. equity market suffered. anyone that had four and investors that had british equities suffered -- foreign

investors that had british equities suffered. sterling had its biggest down day in history. political pressure and economic pressure builds on sterling. mag was sayingat , this could be another 15% up to go before the sterling washes this out. sterling is going from part of a large economic block to another medium-sized country. you mentioned that economic adjustment. how long do you think that is going to take? what more can the european central bank do? marc: it is hard to measure and so is the political impact. we know scotland had a u.k.endum to stay in the

because the u.k. was part of the eu. not only scotland, but imagine theyern ireland -- could join the irish republic itself? the u.k. itself could dissolve. many people i talk with in that i ask what do you think about the u.k. leaving and they say it's not the u.k. were worried about, but maybe the whole of the eu. it's almost like a built-in option. in case the eu does dissolve, you want to be in the asset that will have appreciated currency. i can't count on the germans or italy or spain or portugal. draghi said earlier this week there is more stimulus in the pipeline. many people read that as he will give new initiatives.

just today, they launched the .econd round of lpro's something close to 400 billion euros replenishing all loans. impact --re the full next week, we will learn that the eurozone could probably manage out of the deflation. marc chandler, head of currency strategy. thank you for joining us. joins us toaalder discuss the applications of brexit. the dow is down over 4%. ♪

jon: an historic day for the united kingdom.

how will the brexit affect the national security of britain and global security? let's get insight from ivo daalder. he's the president of the youago council on global -- spend a lot of time in brussels we might see a-- dissolution of the european union. how worried about that are you? ivo: you ought to be concerned about it. it is the biggest blow to the european project we've ever seen. britain joined over 40 years ago and they have now voted to leave. in saw immediate reaction .he netherlands and france the politics stimulated by this

vote, the nationalism that is hasng up on the continent been fostered by this vote. we will have to see how well the european leaders and the u.s. can work to keep it all together. how sympathetic were you to the concerns of the leave campaign? ivo: there was this feeling that there was a systematic democracy imposing its will on the people and that is not just in britain. it is felt in other parts of europe as well. including the netherlands and france, two countries that were part of the original european economic community when it was formed in the late 1950's. having lossense of of control, of not being able to see what's going on and wanting there needs to be a

reestablishment of control and blaming brussels for what is happening. it's understandable, but clearly, this is not the way to deal with this problem. turning inwards, moving away from europe, moving away from the international system and somehow saying we will do it all by ourselves and get rid of the foreigners and not have more immigration and we will set our own trade terms, that is not what is good. that will not work in reality and the markets are reacting in a way that says it will not work that way. david: immigration so central to the debate here. how is the eu going to take hold of that conversation and convince people in other countries that it is in their best interest in light of the immigration we've seen for this union to stay together? ivo: this has been a big issue for well over a year. with the large numbers of migrants and refugees coming into europe for greece and italy

-- it's time that europe act forcefully in concert. one way you are not going to solve this is by everyone having an independent policy. small -- too small, the countries are too small for that to work. thank you very much. that is ivo daalder. more "bloomberg markets" from new york and london up next. stocks in freefall today after vote to leave the european union. ♪

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vote, the u.k. decides to leave union.opean stocks him are globally, a massive selloff in europe. >> the latest reaction from .russels the u.k. and the eu starts the process to go their separate ways. and the conservative party starts to think about its next leader. focus on the u.s. market. the closing is coming up. >> i am watching the numbers into back toward the session lows. let's take a look at where we stand. across the board, more than 3% down. we are on pace for the biggest weekly fall in the past five months. earlier, we did hit session lows and we are inching