the sunsets on a volatile week on british markets as britain votes to leave the european union. >> there is the closing bell. alex: global markets buckled. we have to market -- kick it off with our market minute. the s&p lost almost $30 billion. indices losing more than 3%. the nasdaq is down 5%. this is the worst one-day selloff for stock since august 24. nine out of 10 groups declined. the exception was utilities. at one: morgan stanley point down 10%. that they are moving jobs.

>> if you look at the spread between two-year and 10 year yields we continue to see flattening. that is continuing to flatten. this has been one of the biggest stories all year. spain also showing stress on the short term. nothing huge but you can see it is jumping. they have an election that we will be talking about.

taught about the u.k. 10 year yields. if there is one place where there is a bull market it is in the government wants as people will into that safe haven, brand-new low right there, extraordinary low levels in that market. scarlet: let's go back to that other chart we had up earlier which was the intraday. 30 incredible. a 590 point swing for the dow industrials, the lot -- whitest move since last august. in terms of the banks ask lf, the etf that tracks the financials dropping the most since november of 2011. 14%.ff by he gets a quarter of its revenue from the u.k. and ireland. 70 -- 17% from europe. and each down 10%. >> you also had a trade down as well. point swing a 600

and the nasdaq selling off since 2011. saying the brexit wouldn't have an adverse impact on operations. we will look for that one. general motors falling and the auto-parts suppliers also losing big-time. >> the beating heart of the market here. the pound against the dollar and it is the biggest one-day drop on record. we will dig into this later. the pound down like 7.26%. the interesting thing is the central banks taking on the fx market area we want to look at dollar-yen. signank of japan shows no of intervening yet. full down by two

percentage points. you will be interested in this. gold surging higher. typically it is a risk off sentiment. swiss .3 of 1%. intervening coming into the market and confirming they were doing just that. s&p stepso swiss, the in. i wonder what it will take for the boj to come in. of change is address it. i wonder what it takes. alix: that is the perfect chart to illustrate that. goldis the blue line of prices and the white line is the pound index. you see exactly what happened when we start to get the brexit vote.

the pound is coming down. the bank of america with gold rises. it was of what bath across the board especially when it comes to oil. those prices selling off 5%. dollar down a few side. the fundamentals holding up that it is all about the macro and about the risk sentiment. scarlet: those are the market minutes. let's take a deep dive into the bloomberg. you can find the charts using the function at the bottom of the screen. have to pull this off my terminal. someone else go. >> people in the fx market remember it well. when george soros wrote the bank of england. this is percentage team --

change doing all the way back to the early 1990's. the red circle is 1992. the bottom right is here and now. that shows the magnitude of the move today. a 30 year low but the biggest one-day move on record. -- the markett has been caught wrongfooted but there was a significant elevation and it goes to show how uncertain this market was going into the event and how wrongfooted it was coming out of it. the biggest one-day drop on record. and the fx market guys. >> the has got to be the chart of the day. i want to talk about the economic potential ramifications of the u.k. leaving the eu. this is the ect, our function on the terminal and it is a great 'ay of looking at countries

major trading partners. we can see that chuckle -- exportand the biggest market, germany. he can see why the sticks are so high. very isive is france also big but $24.3 billion. if we look at germany as the main country we're talking about, the united kingdom is their third biggest export market at 95 -- 92.5 billion. money at stakeof on both sides about keeping these trading relationships open and regardless of the vote and perhaps the anger that others in europe might feel at the u.k. right now there is not a lot of excitement at the prospect of seeing these trade ties deteriorate. that will be a driving force, an important factor as these negotiations take lace.

>> i had full chart of how much money was lost. this is charting the uk's richest people. the 15 wealthiest citizens. they had $5.5 billion erased from their fortunes today. in fact the richest person had the biggest loss, $1 billion. i love comparing this to other crises. he for losses, to be fair. they are nowhere near the paper losses they might have seen in january and henry but that is a really ugly number on this friday. scarlet: for one day. that is the key. i am taking a look at the sum of all international fears. it is the euro stoxx 50 divided by the s&p 500. when the line goes down stocks are lagging. this was long before the brexit vote and this is the most recent

lower. this underperformance is 60% since 2010. and u.s. stocks are valued toward high-end. european stocks that she and they have priced in a dire set of outcomes. orderill be a two-year three-year or five-year project. john: no one knows how long this will unfold. >> francine lacqua joins us from westminster. it like in london right now, what are people talking about? prancing: people are talking about the vote. there is a sense of shock votede london overwhelmingly to stay. people are taking it in their

stride at the moment. is almost 9 p.m. here. people are trying to take a deep breath and see what is next. the resignation would have come as a shock to a lot of people because his opponents, boris johnson and his campaign were saying the prime minister would continue. they wanted to give a sense of continuity. you're talking about the markets. there was the sense of the oil in the southern part of u.k. where evil voted to stay in more than up north. >> his resignation is not effective immediately. what does that mean for his successor, who after that maybe? -- whoever that may be? very somewhat short but thoughtful speech. he listed his achievements and said he could not go on. countryd to ensure the

was in stable hands. it means we have three or four months until october where he thinks the leader of the party who are in power will be elected or chosen. we have a couple of names we are expecting to be put in place over the coming weeks certainly over the coming days with people putting their hand up and saying i am up for the job. if you look at boris johnson some were expecting him to be the natural successor to david cameron. he has divided the tory party so much it is not clear whether he told rally enough support become conservative leader. >> what do people see as the prospects for another referendum? francine: this is a problem because scotland had their own referendum to decide whether

they want to stay within the u.k. and at the time, the scots decided to stay in. then the world changed. they are very dependent on the price of oil. that shoots down and so now it is clear that they also want to stay with the eu because they can get subsidies. voted look at how scott in this referendum they want to stay. the minister had no choice but to announce that there is a likelihood that they will look for a second referendum to break away from the pay to make sure u.t they can remain in the everything is theoretical. when you go down to thinking concretely about how they go about it it just seems like a vagal mess. -- a vagal mess. aboutncine was talking

even cameron. here he is speaking earlier about his plans to resign. >> the negotiation with the european union will need to begin under a new prime minister. i think it is right that this new prime minister takes the decision about when to trigger article 50 and start the formal and legal process of leaving the eu.

mark: i am mark crumpton. let's head to first word news. president obama is in palo alto, california for an entrepreneur summit at the first topic was his reaction to the uk's decision to leave the european union. president obama: i think yesterday's vote goes on -- spoke to the challenges that are

raised by globalization. while the u.k.'s relationship with the eu will change, one thing that will not change is the special relationship that exists between our two nations. that will endure. the eu will remain one of our indispensable partners. mark: the president said he had spoken by phone to david cameron and is confident it will come to a orderly transition. the u.s. navy has fired a second commander in connection with the 10 american sailors whose boat drifted into iranian territorial waters in the persian gulf in january. the sailors were detained by iran for about 15 hours. a u.s. official said additional punishment against seven other sailors are under review and decisions will be announced next week. a new report from the cdc confirms just how harmful the flint, michigan water crisis was to the city's youngest residents. children under six drinking water were nearly 50% more

likely to have a lead -- blood lead concentration level of concern. exposure can effect in health including their intelligence even at low concentrations. local news 24 hours a day howard i more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. back to you. >> we saw major losses in the banks like morgan stanley and deutsche bank. amie dimon had warned that exit could cause them to move thousands of jobs from the u.k.. diamond has said in the past is itm the tomb of order of extinct thousand british workers if a brexit for. hsbc said it will keep its headquarters in the event may have to shift one thousand of paris.0 employees to

goldman sachs will move some offices to continental europe in the event of an exit. extraneous now is angus armstrong. looking at these moves, goldman sachs down seven percent and jpmorgan down almost 7%. help me understand which ,iversion or fundamental reason fundamental concern about a global growth slowdown and a slowdown in profits at these major banks. guest: the first issue is the reassessment of economic growth as a consequence of exit. that is the first thing finance a markets have to grapple with. firms that benefit are these key large global investment banks create these banks cannot be as profitable as they will be if

they have to move locations. london is next for nearly efficient place to run financial services. >> talk further about that. can london stay a key center of financial services if the u.k. is not in the eu? many trades.s it is insurance, pensions, lots and lots of businesses. they u.k. has been a leader in global services for two centuries. that will not change overnight because of one referendum vote. when we think about what products it does, we have to think does it really make sense to have a global financial center in london following the rules set by people in frankfurt and that is the fundamental tension that people will be grappling with and announcements we see from morgan stanley and some of the others about where they should put their investment banking headquarters. that is where the tension is.

clearly some businesses will be migrating but the financial sector is much more than just investment banking and the u.k. aboutt: here's more morgan stanley's plan. >> we will talk with our regulators, we will look at having a european hit orders somewhere in europe that will be acceptable to morgan stanley and our regulators in terms of -- >> where would that be? >> dublin or frankfurt. scarlet: what about dublin, could that be the new financial center of europe? >> dublin is a very small city and the idea of bailout investment banks will be very difficult for the regulator with great respect to ireland to cope with that, this is very sophisticated

market with a huge infrastructure from central bank to all the legal support. that is part of the financial center. the real issue here is these companies can move that in doing so they move to a less efficient increases the cost of financial intermediation which is what europe does not need at this time. >> if we went to a pub and asked any employee of a french bank if they want to move from london and face the taxes of paris and beyond, you know what they would say to us. they would laugh in our face. >>l we have a talent issue? that is right. -- we have always had a pro finance government where people have been generally supportive. in the rest of europe, capitals and countries have not been that pro-finance like the u.k. so

to keepanother interest it in london. the question here is how are the regulators in frankfurt and the bank of england going to work this out a cousin it is in nobody's interest to start splintering up the financial center. the question is are how are these guys going to work it out and keep activity located in one place but we have to deal with the reality that the financial regulation is going to the european union and the u.k. will the longer be part of that. john: a judges ruled saying that williams does not have to be purchased by energy transfer. this is the fallout from the plunge in oil prices. the headline here is the judge has ruled in the energy chancellor william steel and it is not a move they have to make.

we will have more coverage as we continue. ♪

>> a historic decision. the u.k. decides to leave the european union. our guest is back with us. the question that was asked immediately today, who is next? we have experienced the push back against that idea by punishing those who want to leave sending a message. do you think that happens with britain, the message needs to be sent, don't you dare try it? guest: it requires understanding u.k. as happened in the

this is a vote about people in looted froming x globalization and the u.k. is not unique in that. we're seeing it us they european union. we see it in france and in america with donald trump, there to a certain extent as well. the rise in population -- in populism is happening. my rating is a have been extremely professional. out is out. if it is in both parties' interest together, an early isution to this, no one interested in trying to punish one side versus the other. then we get into difficult territory. >> what kind of fracturing, what

kind of financial stress to do see in the market today? fixed particularly in europe, what happened to the inter-bank markets, having large falls in currencies and equities. that is where you would expect. the eight x bent -- the central banks in london and frankfurt and new york have all made it there that they stand ready to supply of the lady if needed. , thereger this goes on are a lot of political risks of their. the bigger the challenges for the central banks will be. >> thank you very much. and commodities are getting crushed. what does that mean for other risky assets? more on this story next. you miss" on'd

bloomberg television. ♪

mark: let's get to first word news. the presidential candidates are weighing in following yesterday's decision by the u.k. to leave the european union. hillary clinton says economic uncertainties sparked by choice "underscores the need for calm, steady, experience leadership in the white house." she said the first task is to ensure economic uncertainty created by the break the move does not hurt american families. donald trump not waste time finding a connection between decision to leave the eu and president obama. london innt visited april and expressed hopes that it stay locked. mr. trump told reporters in scotland today some of the votes

were cast despite the president. >> i was surprised that president obama would have come over here and he would have been so bold as to tell people overhear what to do and i think that a lot of people do not like him and a lot of people voted, if he had not said it think the result might have been different. mark: the president warned weaving the eu would put the brits at what he called the back of the queue for u.s. steel. the state of emergency in west virginia today. flooding has overwhelmed the state leaving 14 people dead. there are reports of hundreds trapped inside their homes, and a shopping mall, and a retirement home. as have started to rescue some of the hundred reported stranded in a shopping mall. one officials as it is the worst thing west virginia seen in a century. the top korea official for u.s. relations has said his country is a threat to be reckoned with.

morengton can expect nuclear tests and missile launches. north korea will not abandon nuclear weapons while they are pointing a gun to our forehead." mobile news 24 hours a powered by more than twice etc. journalists and analysts in more than 120 countries. i am mark crumpton. this is numbered. back to you. scarlet: we start in the u.s. the benchmark indexes plunged posted months joining the selloff in double risk assets. the s&p 500 lost more than $700 billion in market value today alone. next yields are down 30 basis points. here's why white. -- credit rating agencies

the bond market is shaking its head and that is significant. the performance of spreads on the periphery was a great. the rally was in guilds. the question is whether that continues. at bankam looking stopped. -- bank stocks. they waved at him almost $17 billion in market cap. overall it was the birthday since 2011. it was a quick rust the board. goldman, bank of america, worst day since 2011 say you have this imperatives, it paints a picture of how ugly it got today. always expect the victim rally. at one point it was the biggest percentage rally since the very thousand seven.

huge surge in the fear gauge. >> i finally get to say this, what did you miss? right? sparking a selloff in emerging markets currencies. and tumbling the most in two months against euro. take a look at this. the highest index, since 2012. free to have you with the program. , it has happened a couple of times. i just wonder does that continue or do they take over the baton given we have had the shakeout. >> it is difficult to say. see isare going to

everyone takes some deep breaths and waits for the sunday of it and seems what the world looks like. we now know britain is out. the circumstances under which the deal will be negotiated. we do not know who the government will be, trevor and we do not know how far the market is paired to test the resolve of the bank of england let alone the fed and/or the boj also play a sick kid current environment and that will affect the level of volatility we are seeing are not saying. mexichem we seem to have index -- an issue that is characterized by an extraordinary amount of solved by it can be essential. you monitored the fx markets for a while. can you think of a historical

time that feels similar to this? brexit is tough. we look to lean on the 2000 year a -- 2008 era and i am referencing black wednesday in 1992. about atalking normalization bid from the fed and higher rates. i think people need to accept there's no such thing as normalization. the circumstances where faced with now it written leaving or the fed trying to raise rates or anything like that, we cannot anchor it to historic standards expect butwe do not a slight deviation given current circumstances and that is what is troubling most able and driving a lot of people into cash. it is a cliche. governmentng under

paper mattresses, if you will. scarlet: the u.k. outfit -- outlook has been cut to negative by moody's. in the future the rating could be downgraded. when you look at the emerging markets currencies, we had jonathan bring up the mexican peso and the polish body -- zloty. what does that tell you about the extent of the selloff? guess: it has people running scared. it has people expressing opinions of what has come to be known as risk often every asset class and every currency. and in this case the mexican

peso is no exception. the extent of it reflects the paradigm we are sitting in. is it overdone east on what mexican economic fundamentals look like? probably. i am not a mexican specialist on the economy but nonetheless it goes hand in glove with what we are seeing globally at the moment and the last 48 hours so not uncommon. scarlet: you were talking about volatility and fx with john. does that afford liquidation of a large financial portfolio, are we looking at that kind of washout at the volatility stage is to mark fixes difficult to say. point, it was a most like a textbook execution. we traded up to 150 on the release of sunderland exit polls and results. we barely ticked that 150. 150 tradednce

whoever was long got short at 155 and sure enough within 20 minutes we were 149, 148 and as the polls came further in. what you end up seeing is that there are people long on sterling, because ultimately -- is someone owns it somewhere and that is what we saw in two 140 from the lows, reaffirms that evil will be selling out of that. over the we are -- coming few days we will kick -- be confined to levels we have been locked in or anchor points we have seen, maybe a bit lower and it will be a struggle above gets going.rally people were relatively flat across the g7 space going into

this event. >> just to wrap this up. the u.k. outlook cut to negative and movies saying public finances are likely weaker. the outlook for growth has been manage somewhat. current tradeing deals. are we going to face another much there is not scalability that is coming from europe and the leaf movement. going forward is there a nugget -- another negative shock when the market gets comfortable that there is not this a messy divorce that takes place over several years? >> if the market becomes comfortable, that is complacency and deserves to be punished. the leave campaign has yet to voice the methodology by which they are planning on leaving. david cameron resigning today did not help matters.

where faced with this uncertainty. economically speaking britain was not fantastically off prior to the vote. thus we are faced with extra shocks of what is could mean. it we extrapolate or the market extrapolates what this could mean or it cements what it does mean and overall provides continued pressure on the sterling going forward. >> great to have you with us. : we will take a look at how this ties in with economic stresses. that is coming up next. ♪

scarlet: europeans are feeling less positive about the eu. here now to explain the relationship between the two is a political science professor at stanford university, a senior who -- fellow at the hoover institution. >> why are we seeing all this political upheaval right now? the 1950's about 50% of labor forces in europe and the u.s. were industrial jobs that were pretty safe beginning in the 1970's and 1980's with automations and transferring jobs to china that percentage fell down and change the politics which is a labour party were christian right party or democrats versus republicans create that began to shift and the forces that brought about

the decline in those industrial jobs are -- all those forces are still work. so no country has been able to solve that and the politics has trying to put different coalitions together. in the u.s. you try to put together the old democratic party labor group with college professors were much more socially liberal and it just -- no one has found a stable solution. alix: it seems that immigration and equality art to big faces they have to face but no one has a solution. the $24 question. the elites in the that's in europe and the u.s. and other places have continued to push integrated -- immigration, unification, and the countries have not follow that. if you look at the voting

patterns, the turnout is much electionsnational than it is in european elections and for the first time that set of issues, the immigration and integration, what is the role of the eu, inequality, those issues are on the table and politicians -- whackay welcome all a mole. they have to do with them individually. >> we spent a lot of time talking about nationalist parties. the labor heartland voting to leave. spend more time looking at a dissolution left paying some much attention to nationalist movements. i do not feel like enough people are talking about it.

david: the spanish elections will be an important factor. thes being attacked by acting minister by saying they were not for it enough, do not put in a left-wing party, same in greece. -- populism is not entirely on the right. it comes up from the left also and that has not been talked about very much. and i suspect with the exit of britain that you will see more left populism. ladies affirming the eu's aaa rating maintaining its stable outlook, the question is will we see more brexit type movements accelerate pace in the rest of the eu? if the people of europe are very much against the integration, pro-immigration stance and eu leaders, how much further push

back will we see and are there more dominoes to fall? dramatically by country but it seems to me the two countries that have the highest anti-europe feeling is hasce and marine le pen called for a referendum in france. she will be in one of the two slots in the first run off and so that will be and the second one is the netherlands. those are the two most likely to be close to britain and in france it will depend upon whether the parties of the left and center can unite against marine le pen and the front nationale. is a good sign they have not raised the rating. it is the belief it will not fall apart too much more.

scarlet: i give her joining us. will explore what will be the next shoe to drop. ♪

our showe on before the referendum and you shakene reason is for the -- sake of the eu. what does that say now about the

future of the remaining eu countries? guest: i think that is one of the biggest challenges now because i think it may encourage the breakup of the eu. it, one country has done the first country to leave and when he six years by it will encourage others. it may encourage others and that if the euorrible project itself started to unravel. that is quite apart from the threats to the integrity of the united kingdom itself. scarlet: what does the eu now to make it more difficult for the u.k. to negotiate its way out of this union? does it make it punitive so that other countries do not follow suit western mark guest: i do not think that would be done or that would work. these things are going to be fairly slow-moving.

the decision has been made, article 50 will be invoked. but actually the terms of britain's departure from the eu will take a number of years to negotiate. massive negotiations of all the existing treaties and so on. but meanwhile there are elections, general elections in a number of european countries and we have strong growth of nationalist parties. i think they will be saying, look, if the u.k. can do it, let's take our own countries into our own hands and get them out of the eu. the scottish minister saying the second referendum has to be on the table. what do you see as the prospects

going forward and ultimately the dissolution of the u.k. as we know it is to mark >> a think they are very serious as you know. voted pretty overwhelmingly for remain. nicola sturgeon will press for another referendum. she thinks under the circumstances there would be a vote for scottish independence. and i think she will get another referendum. i do not see how that can be withheld. and then of course there is northern land -- northern ireland. big problem. a northern ireland voted to remain. are serious about taking control over their own borders they would have to stop the movement between the two islands and of course between scarlet:nd the u.k. what kind of leader would be best positioned to manage all this? who within the u.k., boris

johnson or theresa may? a differenceis between one would think best and which will actually be. i think it will be forced johnson. he will -- i do not think he will want to maliciously breakup the european union. he will probably be the best we will have. alix: thank you for joining us. scarlet: we give you a roadmap for what to expect in the coming days and months. ♪

scarlet: here's a quick outline of the coming events in the coming days and weeks. this extending members will be

meeting in berlin on sunday. this will be the first of many meetings. travelse prime minister to brussels. start ofot trigger the the process. that is up to the next prime minister when mr. cameron resigns in three months. u.k. has two years to negotiate a way out of the block. >> and then a general election to clear the decks and a lick -- elect a government. over anda lot to take the markets will be moving. be sure to tune into our special coverage this weekend. alix: we have updates throughout the day and a live special show at 12 p.m. eastern and 5 p.m. london time. on radio we will bring you a

very special surveillance from 7 a.m. in new york to 12 p.m. in london and sunday we are working create we have full coverage across tv and radio starting at midnight in new york and ibm in london. e

>> this is an example of the market getting it wrong. >> markets have been very wrong. >> they have got it wrong again. >> spectacularly called this wrong. >> the bookies got it so wrong. >> the polls got it wrong. >> everybody has got it wrong. >> why we bothering telling us what the polls are saying, they are wrong. >> the polls a wrong. re wrong. >> it turned out to be completely wrong. >> every prediction has been wrong, right? >> they were wrong. >> over and over and over and over and