State Street says Q2 revenue outlook ‘broadly in line’ with prior expectations

Speaking at the Morgan Stanley U.S. Financials, Payments and CRE Conference, executives from State Street stated: “So maybe it’s a good time just to do the breadth of guidance and I’ll cover NII as part of that because I think it you know, it factors in a way that that’ll make sense. I think as we said, our expectations are broadly in line with where we were in April in terms of guidance, although there are always some moving parts. And let me go through them for context at a macro level. Daily average global equity markets remain strong and at this point in the quarter are roughly at our expectations. Back from April, remember, they were up they were down there about and they’re back up. And so we’re roughly in that zone. At the same time FX volatility and spreads are somewhat more muted than what we had previously expected. And specials activity and securities lending continues to be light. And at the same time, client volumes are generally a bit higher as we’ve seen, you know, some of that client confidence that I described. And then while the Fed continues to hold rate steady, we have seen a reduction in the pace of quantitative tightening. So that’s been, you know, beneficial in deposits but you know a slightly so and just last week we saw the ECB as I was about they start to cut but I think I’ll say cut once because that may be all she all they wrote for a bit so anyway a fair amount of dynamic activity a fair amount of movement given these factors we now expect 2Q fee revenues to be more like about 1% quarter-on-quarter, which is slightly below our prior outlook of up 1.5% to 2% sequentially primarily reflected the muted FX volatility and muted equity specials activities and levels that I mentioned just a moment ago. However, they should generally be offset by our 2Q NII coming in towards the better end of our range of down 2% to 5% quarter-on-quarter as the deposit levels that I just mentioned have been relatively healthy quarter to date and more in line with first quarter. So taken together, our revenue outlook is broadly in line with our prior expectations. Expenses are expected to come in within our previous range of up 2% to 2.5% sequentially, perhaps towards the higher end, but generally in line still early to be sure, we’re got one more month to print.”