As the leaders of the 20 top economic countries meet in South Korea answers to the major countries economic problems loom large on the agenda. And with all the problems they already have news sends the tech industry stock lower on Cisco's lower earnings reports. Of course the big issue of the American delegation is to address the problems of currency control by Japan and China which keep their currencies lower against the dollar than the free market would if they were allowed to truly seek their proper levels against the dollar.
Stock futures fall as G20 summit convenes
NEW YORK - Stock futures slipped Thursday as world leaders attempt to come up with plans to strengthen a weak global economy.
Volume could be light because of the Veterans' Day holiday, which would exaggerate moves. Bond trading is closed for the holiday and the government is closed so there will be no readings on the economy.
The Group of 20, which encompasses leaders from major rich and developing nations, are meeting in South Korea and trying to hammer out plans to help support a global recovery that has accelerated in some countries like China while more developed countries like the U.S. have struggled to rebound.
Currency manipulation, trade gaps and protectionism are the major topics the group is expected to discuss. Some countries criticized the U.S. last week after the Federal Reserve announced a bond-buying program that effectively cut the value of the dollar. The U.S. and others have criticized China for holding its currency artificially low.
A weak currency helps a country's exports because they become cheaper to sell overseas. That can lead to big trade imbalances and protectionist reactions from government's trying to keep their own countries' goods from being priced out of the world market.
The dollar did gain ground against the euro Thursday, but slipped against Japan's yen. The Japanese government has flooded currency markets multiple times in recent months with yen to cut the value of the currency as it hovers near a 15-year low against the dollar.
A steadily declining dollar over the past two months has helped funnel money into stocks and commodities as investors seek better returns.
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