The Morning Call - Sports Direct drops as pre-tax profits come in 67% lower.

Highlights of the Day

Asian Markets

Asian stock markets are mixed, with investors treading cautiously ahead of the U.S. Federal Reserve’s monetary policy decision later in the day.

U.S. Markets

Wall Street’s main indices finished mixed as the Federal Reserve kicked off its two-day rate-setting meeting, alongside several positive updates from corporate heavyweights such as Boeing and 3M.

Today's News

Theresa May will travel to a critical EU summit with her authority diminished after Tory rebels inflicted a humiliating House of Commons defeat on the government in a major Brexit vote. MPs proclaimed Parliament had “taken back control” of the Brexit process after they defeated the government to ensure a “meaningful vote” on the withdrawal deal. The Prime Minister will hope it does not damage the confidence of EU leaders in her authority to conduct Brexit negotiations as they prepare to rubber-stamp a move forward to trade talks.

The US Federal Reserve hiked its benchmark interest rate by a further 0.25 percentage points, while forecasting moderate economic growth and continued gains in employment. The Fed raised the benchmark, setting its target range of 1.25 to 1.50% in its fifth quarter-point hike since December 2015. The central bank’s monetary policy committee made the widely expected announcement after bond market indicators had shown overwhelming Wall Street expectations for tighter monetary policy, with the US economy growing at an annual pace of more than 3% from April to September and an unemployment rate of 4.1% in November, the lowest in 17 years.

Sports Direct posted a 67% drop in pre-tax profit for the half year even as group revenue rose. In the 26 weeks to 29 October, reported pre-tax profit fell to £45.8m from £140.2m in the same period a year ago, while revenue edged up 4.7% to £1.7bn. Excluding acquisitions, disposals and on a currency neutral basis, revenue increased by 1.2%. However, UK sports retail revenue was down 1% to £1.1bn due to reduced online promotional activity and store closures as part of the continued elevation of the portfolio.

Bunzl said it was considering further acquisitions after the purchase of an industrial packaging company took its spending on takeovers this year to a record £600m. In a trading update the distribution and outsourcing group said it had bought Lightning Packaging, a UK supplier of boxes, tapes and other packaging products with annual revenue of £14m. It did not disclose the price. Bunzl, whose products include packaging, catering equipment and safety wear, said trading was consistent with expectations when it posted third-quarter figures in October.

Australia’s competition regulator has warned that it is likely to block BP’s proposed acquisition of Woolworths’ retail fuel business. BP said it was disappointed with the Australian Competition & Consumer Commission’s decision as it believes it could sell off some of the outlets in order to avoid any competition issues. “In light of this, we are currently consulting with our lawyers to determine our next steps,” said BP Australia president Andy Holmes.

Petrofac said it saw a recovery in new orders as an uptick in oil prices boosted project activity, and cut its full-year capital budget for the second time. Oilfield service companies had been hurt by weak demand as subdued oil prices forced exploration and production companies to cut capital expenditure and defer or cancel contracts. Petrofac, which designs, builds, operates and maintains oil and gas facilities, said it secured $5.2 billion in new orders so far this year and it continued to see a high level of tendering activity in its core markets.

Ocado grew its retail revenue by 11.6% to £373.8m in the 14 weeks to 3 December. The average number of orders per week increased by 11.1% to 280,000, while the average order size was 0.3% higher at £106.11. Ocado said the average order size is stable as inflation picks up, offsetting a slight increase of order frequency as more customers take up Ocado Smart Pass.

Gold hit their highest in a week, as the dollar was on the defensive after tumbling in the previous session following the U.S. Federal Reserve’s widely expected decision to raise interest rates.

Oil Prices rose, lifted by a fourth straight weekly fall in U.S. crude inventories, though climbing output capped prices well below the 2015 highs reached earlier this week.

Companies Reporting this week

Day	Companies
Today:	Sports Direct International

Early Market Movements

Market	Index	Change	% Change
UK 100	7,483.1	-13.4	-0.2%
UK 250	19,983.1	-78.3	-0.4%
GER 30	13,103.4	-22.2	-0.2%
FRA 40	5,394.4	-5.0	-0.1%
U.S. 30	24,585.43	+80.63	+0.3%
U.S. 500	2,662.9	-1.3	-0.1%
OIL (BRENT)	62.85	+0.41	+0.7%
GOLD	1,255.93	+0.43	+0.1%

UK Risers & Fallers (8:15am)

Company	Price	Change	% Change
Debenhams	34.13	+1.13	+3.4%
BT Group	273.45	+5.45	+2.0%
Randgold Resources	6905	+110	+1.6%
Capita	415.8	-50.1	-10.8%
Standard Chartered	758.9	-15.1	-2.0%
Morrisons	210.8	-3.7	-1.7%

Latest Broker Views

Company	Broker	Recommendation	Price	Target
Glencore	Barclays	Overweight	354.15	400
RDSB	Goldman Sachs	Buy	2435	2790
National Grid	Goldman Sachs	Sell	870.5	877
Barratt Developments	JP Morgan	Neutral	631.5	650

Forthcoming Economic Data

Time/Date	Previous	Forecast	Outcome
10:30am: U.K. Retail Sales m/m	0.4%	0.3%	–
1:00pm: U.K. MPC Official Bank Rate Votes	7-0-2	0-0-9	–
1:00pm: U.K. Monetary Policy Summary	–	–	–
1:00pm: U.K. Official Bank Rate	0.50%	0.50%	–
2:30pm: U.S. Core Retail Sales m/m	0.1%	0.6%	–
2:30pm: U.S. Retail Sales m/m	0.2%	0.3%	–
2:30pm: ECB Press Conference	–	–	–