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Top Financial News – Alphabet, GameStop Stock Splits

Top financial news of the day: Google parent company Alphabet's 20-for-1 stock split is now a reality. GOOG and GOOGL share prices have fallen from around $2,300 at the end of last week to around $108 at the time of writing, making blue-chip stocks more affordable for a wider range of investors.

Another company making financial news is video game retailer GameStop, which is planning a 4-for-1 stock split on July 19 from its current stock price of around $145. The GameStop stock split will take effect after the market closes on July 21.

With equity markets currently in a bearish sentiment, lower equity prices make sense, especially given the increasing likelihood of a US and EU recession. A stock split does not change the market capitalization of the company, but rather increases the number of shares available, thereby lowering the price of each individual share. As of July 19, GOOG's current market cap is $1.48 trillion and GameStop's is $10.78 billion.

Also this morning the ILO unemployment rate for May will be released. The benchmark came as expected, unchanged from the previous result of 3.8 percent.

The ECB releases its Bank Loans Survey today ahead of the central bank's rate decision on Thursday. It comes at a sensitive time in the eurozone economy. The outlook for European interest rates is becoming more hawkish amid a weaker growth outlook, hampered by the Ukraine conflict and uncertainty over COVID-19 developments.

In other central bank news this week, the People's Bank of China (PBoC) will release its latest rate decision on Wednesday, July 20. The PBoC has so far remained dovish amid the COVID-19 outbreak that has impacted industrial productivity. Any surprise up or down can move the CNY currency pair.

The Bank of Canada (BoC) will release all the latest important inflation data for June tomorrow. The CPI is expected to have increased to 6.7 percent in June from 6.1 percent previously. Given the current trading market inflation sensitivity, a surprise could move the CAD cross while raising expectations for the Board of Commissioners' next rate decision.

Closing this week's trading news, the Bank of Japan will announce its interest rate decision on Thursday. The central bank is not expected to change its rate forecast from the current level of minus 0.1 percent, so any surprises could move the JPY currency pair.

What is a stock split?

The best way to explain a stock split is to imagine you own $1000 worth of stock in a company. The company's shareholders decide to divide the shares at a 2:1 ratio to increase liquidity or to facilitate the buying and selling of shares. Now you hold two shares worth $500 each. Stock splits usually occur when the stock price rises too high to facilitate liquidity in the broader market. They do not change the market capitalization or the overall value of the company.

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