Lens flare?
Is it a lens flare effect not working properly? Looks like something applied to the sky using an overlay texture but the texture is lacking an alpha component or the overlay method is not supported. Is it OK on a cloudy day and at night?
Try messing with all those horrible incomprehensible settings a couple of menus down on your graphics card. Or set the rendering preset to "quality". Or set it to "performance".
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