Big Expectations at Goldman

Up Wednesday is Lehman, where earnings are expected to rise to $1.95 a share from $1.83 a year earlier, on an 11% gain in revenue to $4.97 billion.

Lehman's "overall business is pretty diversified," which will offset any pressure in the U.S, says Joe Dickerson, an analyst in London at Atlantic Equities. "Bear is relatively less diversified than Lehman."

Bear Stearns goes Thursday morning. It's expected to make $3.80 a share, up from last year's $3.54, on a 14% rise in revenue to $2.49 billion.

"My suspicion is that a lot of the asset management assets at Bear Stearns may be invested in mortgage-related securities," Dickerson says, "which could pressure returns and therefore future growth and assets under management."

Dickerson agrees that any spillover into additional businesses will be "something to watch."

Another firm to watch will be Morgan Stanley. Analysts expect it to make $1.87 a share, up from $1.51 a year ago, on revenue of $9.87 billion. Last week the firm reportedly renewed financing for troubled subprime lender New Century Financial(NEW Quote), whose shares have plunged nearly 80% in the last week. Morgan hasn't set an earnings release date yet.

Overall, Morgan Stanley's subprime exposure is "difficult to handicap," says Mark Lane, an analyst at William Blair in Chicago, "but even if there is an issue it doesn't mean they can't make it up somewhere else."