State Street Corp (NYSE:STT) Q3 2019 Earnings Conference Call - Final Transcript
Oct 18, 2019 • 10:00 am ET
third quarter catch-up accruals as pricing pressure continues to stabilize, while management fees are expected to be up 1 percentage point or 2 percentage point, driven by the carryover of strong inflows from this quarter.
And while markets are always difficult to forecast, we currently expect our markets businesses to be down somewhat assuming lower levels of volatility than the third quarter, while processing fees are expected to be up sequentially driven by fourth quarter seasonality in Charles River and the absence of some market-related adjustments.
In regards to NII, we will continue to see downward pressure from the decline in long rates. And with another rate cut, we would expect to be down 3% to 5% on a sequential basis, excluding the $20 million of episodic benefits we experienced in third quarter. On expenses, we expect expenses, excluding notable items and including CRD, to be flattish sequentially. At the same time, we remain confident in achieving our full-year underlying expense reduction of 1.5% year-on-year, excluding both notable items in Charles River.
And as we mentioned previously, we are conducting a fundamental review of our technology cost structure and expect to have more information to share with you later this year. Finally, we expect to see the full-year tax rate come in at the lower-end of our tax guidance of 17% to 19% for the full year.
And with that, let me turn the call back over to Ron.
Ronald P. O'Hanley
Thank you, Eric. Operator, let's open to questions.