tv Bloomberg Markets Bloomberg July 7, 2022 1:00pm-2:00pm EDT
>> volatility raining over the markets but it does not just the federal reserve driving trade policies. this is "bloomberg markets." kriti: green on the screen when it comes to the s&p 500. i'm curious how much of it is an fx story. you can see the weaker dollar, does that perhaps incentivize more funds into the s&p 500? it seems to be perhaps part of the story come up 1.3 percent on the benchmark index. take a look at the yield story, where you see a lot of volatility up, almost a spate -- eight basis points, it's all
most like we have gotten used to this move. that is not normal. 3% on the 10 year yield, dive into what this means. the big story of the day, the cable rate heading 120, perhaps dropping below further on the resignation from boris johnson. how long does he stay in power? who's next in line? we discuss the and the market applications, and lastly let's talk about brent crude. the entire commodity complex is making a bit of a rebound. 105 on brent crude. how much of that is a dollar story? once again, we have to circle back to the boris johnson resignation, the prime minister announcing his intention to not only resign his leadership brought down by a series of scandals resulting in mass resignation by his cabinet members. he will however stay in place until a new leader is installed. let's go live to bloomberg's guy johnson in london who is following the latest. thank you, as always, for joining us. walk you through -- walk us through what happens now that you have this resignation on the table. what timetable are we looking at?
guy: let's think about the process happening here, boris johnson announced his resignation but he will remain as a caretaker prime minister. that cannot last very long. at some point, policy decisions will have to be made. there has been a cabinet minister -- cabinet meeting today. the readout from the cabinet meeting was for the time meeting of the policy announced will be taken or made. the timeframe will be relatively short. they have a government in place, it is operating, but it cannot really make any decisions. the conservative party needs to get on with this. the way the system works is the next prime minister will be chosen from within the ranks of the conservative party. they still have a majority in parliament behind me in that process is a too stage process. people over the next week or so -- mps over the night we go so will vote on who the bank -- they think the prime minister should bp they will get down to two candidates who will then be
put to the grassroot members of the conservative party who will have their say on who their leaders should ultimately be. in the moment, the outside candidate seems to be front and center. over a few weeks ago you said ben wallace, the current defense secretary, would he potentially a new leader of the kind -- be potentially a new leader of the conservative party. he has by far in the way the lead candidate among conservative grassroots members. we will go through this process over the next few weeks. who will be determined ultimately become the leader -- will ultimately become the leader and who will have an impact in the u.k. are we going to see stability moving on from here? kriti: let's talk about the economics. you said three years of chaos and also three years of tax policies, something conservatives at least in theory are not supposed to be advocating for. your thoughts on how this plays out. where are the economic
circumstances -- what are the economic circumstances or scenarios the market should be keeping their eye on? guy: we have been to the pandemic, the process we had to go through during the pandemic was to support the economy. that resulted in great spending. boris johnson appeared to be getting a taste for the spending. we have gone away from this idea that we are a small state conservative party and that seems to be now embedding itself. the idea is are we going to continue with that or are we going to change that. i think that is the question a lot of people are asking. the opposite budget responsibility put out a note saying if the government would cut taxes, we would find ourselves in a situation where that would increase the deficit and that would potentially make inflation even wears. it is a real challenge for who comes next as to whether or not they will cut taxpayers. the alley a logical -- the ideological back round of the conservative party as they will cut taxes. will be the end a position to allow that to happen? there was going to be a big
policy speech on this front and that has been canceled. we will have to wait for a while before we get a new prime minister or chancellor, before we know what direction we are ultimately heading in. kriti: our very own guy johnson, thank you for turning us rights out of abington green. let's stick with the u.k. story. there economy has showed resilience in 2022 but there are signs a more meaningful slowdown is approaching. for now we bring in our international economics for wells fargo. let's talk currencies. you are looking at 120 on the cable rates. there are a lot of issues here, not just the cost-of-living crisis but brexit negotiations as well. how low does cable go? nick: our base forecast and it is because of the high energy prices in the economy and the bank of lingo and raising rates, our base -- and the bank of england raising rates, our base forecast is down a little bit from where we are here but the low we saw during the pandemic was 100 14 and certain and the
balance of possibility where we could revisit those levels because the u.k. has sometimes hit and that will weigh on the pound. kriti: does the leadership contest have an effect on the contest? if we talk about who could replace boris johnson and list trust to may go harder on negotiations, i wonder if that has a ripple effect in say the euro. nick: probably more ripples for the pound than the euro. i think again the u.k. is only one side of the negotiation. the europeans are the other side. i do not think it has a directional view or directional impact on the currency but i think the headlines will continue, the brexit headlines you mentioned. maybe headlines about who will be the leader. i think we will continue on volatility but for me it does not change the overall trajectory but may be some of the volatility around it. kriti: let's switch to the euro side of it. in addition to watching the cable rates, we are on euro-dollar watch as well. in the last couple days, seems like analyst forecast have
called for a weaker and weaker euro, as we as 90 i have heard from some. your take on how far that weakness could go, especially in this environment where it seems like there is a race to who could have the strongest currency. nick: i think certainly below parity is a widely held view and a view we hold as well. i think we could easily get to 95. also because there is a sharp divergence between what we expect from the federal reserve for example with inflation as a real problem, still a real problem. we think the fed rates will get up to 4.25 maybe 4.5. when you look at the divergence that contrasts the interest-rate path, no reason to expect the euro will continue to move lower and 90 is quite a ways away. i think 95 is a reasonable range. having said that, and i have been around a little while, i remember in the early to 83 so
there is plenty of room to the downside. kriti: then factor in for example if nord stream one, which is due to be shut for maintenance next week, never resumes production. the risk of russian gas getting shut off far before the winter hit zero. walk us through the worst case scenario there. nick: that is a real issue. i think it would certainly be problematic for the manufacturing sector. the question becomes, does the german government and other governments try to come up from the consumer side of things, try to at least provide some fiscal support? do they look for other ways of sourcing energy for example? it is problematic. what i would say with respect to the eurozone is we do not forecast a recession for the eurozone yet. there's a couple reasons for that. number one is the ecb will not be as aggressive in terms of raising interest rates and the consumer still saving household
finances reasonably good and that will help them during the early stages of the high living costs. that will hold things in. with the gas situation with russia, germany, other parts of your, -- euro, if russia and putin did play hardball, i think downside to our europe or cast and that could be the thing that pushes the euro into recession which is what we also forecast in the u.k. recession by early next year. kriti: seems like there was all most this inevitability with european calls -- recession calls that we now see coming to the forefront. thanks as always, nick bennenbrook, international, and a -- international economist. mark: in the u.k., boris johnson will stay on as caretaker until a new prime minister is chosen. the timetable for the process will be announced next week. prime minister johnson made a brief statement today outside of number 10 downing street. >> for that new leader, i say i will give you as much support as i can.
and to you, the british are lament, i know that there will be many people who are relieved and perhaps quite a few also disappointed. i want you to know how sad i am to be giving up the best job in the world. mark: concerns over the prime minister's leadership have been growing for weeks and recently snowballed. it was only on june 6 a narrowly survived as she narrowly survived a confidence vote a -- among tori mp's. vallone -- below tamir zaleski met in kyiv with senator richard blumenthal of qinetiq and lindsey graham. the meeting came a day after siletz key said finally western artillery has in his words started working very powerfully for ukraine. the lines of communication between the u.s. and china are
growing. u.s. general mark milley, the chairman of the joint chiefs of staff, spoke with his chinese counterpart by phone today. the u.s. says the call focused on improving crisis communications and reducing strategic risk. u.s.-china talks have picked up ahead of a call with president biden and xi jinping as soon as this month. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg.
kriti: another step for the german automaker toward electrifying's lineup. we spoke with herbert diess about building more factories and when he sees the chip shortage coming to an end. >> do you feel now in good shape to get up to six plans and euro, 5000 jobs here, 20,000 jobs in europe created by this endeavor, and as you said, we are still open for some more partners. a damond -- demand for batteries will be huge. also beyond auto. >> and what sends beyond auto -- sense be on auto? dooming batteries -- sense beyond auto? >> batteries. the batteries we are producing could also be used for storage capacity. >> you are building a nice to an
ice plant and you are looking for a place in europe where you also build cars, looking for a place in the u.s. where you also build cars. are you trying to become more self-reliant in each of your local regions? of course you are a global company but are you looking to do a sort of local deglobalization? >> no because battery production should be low because it is heavy weightlifting as you said, those batteries are really a lot of materials, raw materials. it is a significant supply chain so you need a lot of those resources, cobalt, copper, huge amounts. you should be close to the battery plant because if not, [indiscernible] so it can't work if you wait for batteries coming from asia into europe. you have to be local and this is
why also our investment will be relatively close to our assembly plant. >> what do think about the idea of getting away from the big, global supply chain, becoming more self-reliant as a lot of companies have been talking about after the supply chain problems we have seen? >> actually, if i look back through the supply chain problems, it was not about logistics or regional. it was about covid and it could happen 20 kilometers from here and 5000 kilometers in another continent. we as a company are relatively self-sufficient in the region so we are producing in north america, in mexico, not an america, for the american market. we produce 90% of our chinese product in china. we produce i would say 95% of our latin american projects --
products in latin america. there are always a few components like chips in semiconductors and i think everything will get more expensive. if we dream of localizing everything and there are societies, countries, conditions which give some nations an advantage and we should use a competitive advantage through the world. i'm not in favor of becoming fully self-sufficient and i think it is also a dream and would not improve. everything gets more expensive and we are not really getting better. kriti: that was the volkswagen ceo speaking earlier with our very own matt miller. let's stick with a chip story. you did hear him talk about the supply chain issues. this electronics company reporting a better than expected jump in the corridor and easing
concerns about soaring chip costs in the industry. let's bring in the senior technology analyst for bloomberg intelligence. thank you as always for joining us. i want to ask about the broader supply chain story but first me ask about the china question. samsung have the 21% revenue jump but it also warned about china. this is a sensitive issue when it comes to where the manufacturing of chips actually takes place. shed some light on that part of the equation. >> sure. think for having me on. i think if we go back to april and may, we had the china lockdowns and that actually caused a ripple effect in terms of supply constraints. our view prior to the shutdowns that we would probably get into the recovery phase, the lockdowns exacerbated the chip shortage, then adding onto that you have a logistics issue, all of these companies trying to get the chips and fly out their
goods at once. that is actually extending the supply chain issues for a lot of industries outside of consumer. kriti: what does it do -- i want to say -- for american chip capacity? the likes of macron or intel where they are trying to bring that capacity and expand it in the states at the same time the united states i believe this week is trying to speak to the netherlands about perhaps restricting some asml technology to china. connect the geopolitics of it for us. woo: sure. the geopolitics has been long-lasting. if we go back to 2016, we had the tariffs implemented or the trade war starting in 2016, 2017 during the trump presidency. the tariffs are still baked in. what we are starting to realize is we were highly dependent china in terms of chip manufacturing. at onto that, we have concerns about the chinese-taiwanese tensions and we have a lot of
chip manufacturing outside on the eastern pacific fronts. one of the things congress is trying to do is bring more manufacturing to the u.s., intel trying to break ground, samsung trying to break ground in the u.s., but that capacity is probably not going to come online until 2024 with a full wrap-up 2025. if in reading the congressional documents, looks like it will only alleviate roughly 25% of the capacity. we will be highly reliant on china for not only the chips but also a lot of the secondary and tertiary components. kriti: you can see the outperformance at the moment. woo jin ho, bloomberg intelligence, we think you as always. i want to mention the headlines we heard from federal reserve officials, specifically from waller and james bullard. we know he is the hawk in the room there. he says the u.s. macro situation is draining fed credibility on the target. we know this in terms of the markets coming perhaps pricing
in more hawkish federal reserve and them playing catch-up. i had a payrolls, tomorrow, that we will get, he says the with labor market is still robust. the outfit expending in 2022. we will keep you apprised of those comments because when we talk about the recession fears, we also have waller saying he thinks fears of u.s. recession are overblown and the yield curve in version is not perhaps the signal we're looking for. for now, this is bloomberg. ♪
thing but when you're unbalanced on what is happening in ukraine, it puts pressure on us and i think it is unfortunately that we will be in this for a long time. kriti: i was west eden speaking in sun valley saying the energy crisis has just begun. let's dive into that in particular with oil with anastasia davies, head of u.s. oil. thank you for joining us i want to talk about where west ended. the supply crunch we are seeing, some of their i want to say there was reassurance in the market that there is that spare capacity in saudi arabia and the uae, the chinese demand might slow down as well, pulling some pressure off. how much of that is really true? anastasia: this has been an interesting week in oil markets. we see prices decline and now they are hovering around the $100 mark. they did that for a few days per the question is other not this continues to decline or we out of the woods. there are a few factors leading
to the weakness in the market. one of the bigness -- biggest is the weakest of the small factors. looks more and more likely that europe and maybe the u.s. hit recessions that well weaken demand. you also have reassurance in terms of supply. opec has increased amount of supply they are targeting to produce over the next few months. russian barrows have been coming out in some markets and have not declined as much as we thought they would. however, there are still threats looming. one of the big ones is china, coming out of lockdown, which means there demand is probably going to pick up. that is always an increase for markets. also on the supply side, opec increasing their targets, a lot of that has remained to be seen if they can sustain that. kriti: i want to put you on the spot here, 30 seconds, i'm curious about the price cap. the u.s. allies say $40 to $60 on u.s. oil will perhaps do the trick read is that the right margin to look at? anastasia: that is the margin
they are targeting for russia because they think that is the marginal cost for producing for russia but all of that price cap discussion will depend on whether or not countries agreed to hit the target and not buy it any price above that and russia is not going to retaliate and take barrels off the markets. kriti: thank you as always. as we had to break, we talk about what is moving in the market. you have oil prices making a rebound. brent crude at $105, wti at $103. this was significant. a couple days ago, this week, you had both benchmarks drop below $100 a barrel. this is significant as we talk about what the ripple effects are and how much of that is actually pricing in the recession that anastasia was talking about as opposed to the supply chain constraints. we will talk about all of that especially when it comes to the broader markets. for now, the s&p 500 up .7%. you are seeing quite a bit of
guy: welcome to the bnn bloomberg audience. i'm mark crumpton with first word news. boris johnson sold -- told senior ministers any major physical decision should be left with its successor according to a readout of the first cabinet meeting after he announced his decision to resign. the statement appears to rule out the tax cuts allies said the prime minister was planning as he battled to stay in power late wednesday. prime minister johnson wants to stay on as caretaker until a new toy leader is elected. the timetable for that will be announced next week.
is accusing several europeans including the former british deputy of spying on military sites as efforts to revive the 2015 nuclear deal flounder. the latest talks that took place in qatar last week made little progress according to the european union and the u.s.. the u.s. is investigating a massive release of methane on a natural gas pipeline generated by kinder morgan for possible safety rules violations. about 25 million cubic feet of natural gas was released from the trans colorado pipeline last month after an equipment malfunction. the short term climate impact of that release was equivalent to the actual emissions of about 8000 u.s. cars. in russia, american basketball
star brittney griner pleaded guilty to carrying cannabis oil, arrested in a moscow airport in february. the charges could result in a 10 year prison sentence. the white house says brittney griner is being held under intolerable circumstances. global news 24 hours a day on air and bloombergquint take power by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. >> welcome to bloomberg markets. the stock market is green on the screen. s&p 500 is up 1.2% but on very light volume. it does make a fourth straight
day of gains, the longest coming up we have seen your to date. keep an eye on the sustainable rally. another sustainable rally seems to be the bond yield story up about seven basis points. you continue to see volatility rock the markets. is there complacency setting in? 120 on cable after boris johnson is resigning. the question is, who takes over and what does it mean for the british economy. brent crude up 4.7%. a massive rally. earlier this we it dropped below $100. >> we have an interesting dynamic today. there is a willingness to step into commodity focused stocks in big movers like diamondback energy up more than 5% today. a materials play like freeport mac moran is rallying. we saw earlier in the week softness in commodities but a
willingness to step in hard-hit tech stocks. today we have a one-two punch in the positive. tesla is up about 5% today. then encouraging numbers out of samsung have been lifting the chip sector with an advance of about 5% so far in the trading session. kriti: in the u.k., the resignation of prime minister boris johnson. take a listen to what he had to say earlier. >> it's clearly neither the will of the parliamentary conservative party that there should be a new leader of that party and therefore, a new prime minister. jon: boris johnson resigning as the uk prime minister after three years in office. his leadership was brought down by a series of scandals resulting in mass resignation by cabinet members. johnson said a timetable for a leadership election will be announced next week and he will
remain in place until a new leader is installed. bloomberg's guy johnson has been covering the developments in london. he joins us now. to reiterate how things of been playing out today, bring us up to speed. i: boris johnson eventually decided today to step down. he made that announcement outside 10 downing street earlier today. datasets in place a process that will result in his replacement being appointed. in the meantime boris johnson will remain as caretaker. how long the process will take is really important. he cannot stay in place for very long as a caretaker. ultimately, policy decisions need to be made. first, you will get the parliamentary party of the conservative party whittling down the candidates to two.
the candidates will be put to grassroots members of the conservative party that will ultimately decide who the next prime minister is. but, how quickly that happens remains to be seen. in theory, it could happen relatively quickly. we could have a replacement for boris johnson by the end of august. it's critical it's done reasonably fast, because, the british economy, the british government has big decisions that have to be made. not only policy decisions around the economy, but related to ukraine, the gas crisis, and of the other issues that need to be resolved right now. kriti: i'm curious about brexit. you had comments from eu diplomats saying that now boris johnson is out of power perhaps some negotiations can proceed constructively. is that the take at downing street? guy: we will wait and see.
it depends who replaces boris johnson. say you get less trust, the current foreign secretary. . a very hard-core brexit supporter. maybe she would take a less diplomatic line then boris johnson. it's hard to believe that would be possible. maybe, the government decides to pivot towards the center and take a more positive approach to the eu. this could produce significant trade benefits to an economy that's really struggling right now. there is an economic opportunity there to do that. we don't know yet. it will be really interesting to see which way the conservative party goes, how much pragmatism there is on the economic front, or how much may be brexit still overhangs what is happening here in the u.k.. kriti: guy johnson in the heart of london. he's been out there for ages. in the meantime, we will get more insight about the boris
johnson decision to resign with jacob kierkegaard of the peterson institute for foreign economics. jacob, your take on the situation and who the candidates can be to help the british economy and also help brexit negotiations. jacob: it is important to recognize johnson said he would resign as leader of the conservatives. he has not resigned as prime minister. he is caretaker and he can remain that for some time. the problem is that this will probably be a contested contest with lots of candidates. you have already heard the mention of liz trust. she is the arch anti-e.u. candidates. there will be other candidates running on the kind of loose curve fiscal policy tax cuts etc. the boris johnson himself would have probably engaged in heading up and forced to resign.
so you have a leadership contest that has potentially far-reaching implications for what the next prime minister can do. remember, this will be a new prime minister without a public mandate. the only mandate this person will have is from a relatively limited number of tory party members that will probably have different opinions of what the u.k. should do than the general public. therefore, potentially, a candidate will either take the u.k. towards more centrist direction or a more extreme one than what orest johnson has pursued. what we can hope for, i think, is one that will be, quite frankly, more truthful, more trustworthy. that is certainly what the eu
and other allies will be looking for. jon: guy johnson was talking about the economic realities the u.k. is facing now. for anyone who takes on the role of prime minister, clearly no shortage of issues on that front. jacob: i think this is one of the key problems. if this is a drawn out process, the u.k. will have a defect old lame-duck prime minister in the midst of what could be a very severe economic downturn. you have very dramatic further increases in national gas prices coming. you have very high inflation. you have interest rates likely to rise further. most market indicators protect a likely recession in the u.k. and it's not a time to be without a captain on the ship. you might ask, why does anybody even want the job now? because, whoever takes over will have their hands full right
away. kriti: jacob, let's talk about the european side. moments before you joined the program i saw you post on twitter about the fiscal issues, specifically germany hitting its debt limit. connect the dots, not just cost-of-living in the u.k. but, should russian gas get turned off as soon as next week, the implications of how dire the situation is fiscally for all of your. >> there is no doubt that such economic warfare by vladimir putin would have significant short-term locations. you would have to have significant immediate reductions in demand meaning partial shutdowns of areas across europe. chemicals and others. you would have retail customers asked to literally turn off the hot water, take shorter showers
and the like. this will hit all of europe. it will ricochet onto the u.k.. you have an offshore potential strike that may be resolved in norway. ultimately, this u.k. is in a different situation when it comes to energy induced inflation already. basically, the short answer is, things will get worse in europe intentionally as of next week. kriti: jacob kierkegaard, thank you for joining us. coming up, we dive into the bond market with lesley stahl convio of ubs global wealth management. that conversation is next. this is bloomberg.
and you and kriti: this is bloog markets. i'm kriti gupta with jon. a roller coaster in the bond market is showing no signs of slowing down even as fed governor chris waller downplays the recession cigna. -- signal. here is leslie, quite the title. the bond market. you are seeing a drastic eight basis point move today alone in the 10 year yield. that's not normal.
to what extent has the bond market become complacent to that volatility? leslie: i think it is a volatility in the bond market that this year has been quite the norm. we went from a 3.5% 10 year yield down to three then 275. this just goes to show how the rhetoric going forward is that the bond market will be accustomed to moving around. we do not think there will be a summer low in volatility. that's one reason when you think about allocation, you have to look into one, liquidity, two, volatility. jon: on that subject of data dependence, who is taking charge with the data? is it the market-leading the fed? or, is the fed catching up? in terms of themes this second half, what are you watching? leslie: i think the market is leading the fed. our expectation is they will
move 75 basis points in july. the minutes are very backwards looking. inflation is a concern and it will give us a 75 basis point move. going forward we don't believe that the fed's move 3.8%. if anything, they well stop and pull back around 3.25. after removed a 75 in july you will be around of the 225 level in five -- fed funds, the neutral right. given we are slowing -- seeing a slowing in the economy and the second half will see more slowing we think the market are leading the fed. kriti: economic data, tomorrow is payrolls friday. what kind of reaction can we expect from the bond market? leslie: the bond market is expecting a strong labor market. i think you will get a smaller
backup in strength and a greater rally in weakness simply because it will play into the recession fear that because the probability has been increasing. the market is expecting a stronger labor market, at least for now. the employment number and the labor market is a lagging indicator. i don't think it's this month or next month we need to look out for. jon: what is the most common question you are discussing now with fixed income investors? leslie: listen, this has been an environment where when we see yields, like high yields that have reached 9% or 8%, investors are wondering, why aren't we going into this? look at these yields. the fixed income market has not seen this in decades. we also cautioned about going down in credit quality now. we are not convinced that even though the high-yield market hit the low 600s yesterday and that
may feel attractive, we don't think it's time to go down in quality. we are sticking with up in quality locations, investor great corporate, because there is so much uncertainty the second half of the year, and particularly, because we are not seeing a lot of liquidity comeback at end and the markets are volatile. is not just about chasing yields. you need to watch the credit quality and we are not willing to go down in credit quality yet. jon: thank you for your perspective, leslie falconio of ubs global fixed income. we bring you the latest from the conference in sun valley, idaho and who is expected to get to take the podium this final day. that is next. this is bloomberg.
time for what it's worth looking at $44 billion now. all year we have been watching this saga unfold with elon musk's deal to acquire twitter for that price tag. we are continuing to watch whether they ultimately get to the finish line at that price given what is going on with technology. we know there's a lot going on, both with the economy and elon musk himself. he has several businesses and is constantly on the go. kriti: we will get a clue as to what he is thinking at the sun valley conference on the final day of the add-on emco sun valley conference. joining us from that spot is bloomberg's sonali basak. let's talk steel volume. we are talking about recession, inflation. to what extent is the financing or desire to finance taking a hit? sonali: great question. of course, there are a lot of jitters.
investors themselves are being stung. what kind of appetite do they have for new deals, new investments? venture capitalists are expecting that any recession could be worse than expected. they are preparing for hard times. with that said, what is really important is something i mentioned last time. there are certain areas that people are getting very excited about in particular. take energy. electric vehicles. we will talk about elon musk in a second but the rivian ceo is here as well. there is a lot of chatter around electric vehicles. the rivian ceo has his car here and it's a very attractive electric vehicle. it has been driving around the main parking lot in front of the large. -- the lodge. wes eaten the newport energy founder told me that energy is the new text. you are seeing people look away from the growth stocks of the past to a new era.
as you say, the twitter deal, there's a lot of buzz about it. you know a lot of executives are here. the ceo is here. the cfo is here. the lead independent director is here. elon musk himself is expected later today, later this afternoon, or early evening. he is supposed to be the marquee keynote. that used to be a spot reserved for longtime marquee investors like warren buffett. we are hearing that in sun valley the traffic is a little more than usual. into saturday, longer than usual for this event because people are so excited to hear from him on saturday. jon: when you are doing a keynote at sun valley it's a unique audience. you might get a question from come up in this case, a warren buffett or a jeff bezos.
sonali: it's fascinating because the other folks in the office are certainly the likes of jeff bezos, bill gates has been seeing here today. one interesting person here that has been benefiting from elon musk. the about tesla a lot. also, spacex. dan sondheim says a lot of his private investments are down. people are really worried about deploying capital when parts of their portfolio are bleeding. but he's gaining from spacex. so, how would you people are looking to warren buffett form -- for soaring valuations even in a tough time. kriti: the stock market is green on the screen. you are seeing that amid a low-volume environment. how much of this is sustainable? the fourth day of gains in the u.s., the longest streak year to date. does it sustain, especially,
mark: keeping you up-to-date with news around the world with the first word, i'm mark crumpton. orest johnson has given into pressure and resigned. the prime minister -- boris johnson has given into pressure and resigned. the prime minister blames the hernia instinct in westminster for his departure. >> and is clearly now the will of the parliament trait conservative party that there should be a new leader of the party, therefore a new prime minister and i agree with sir graeme brady, the chairman, that the process of choosing that new leader should begin now. the timetable will be announced next week and i will