Banking on Earnings: Coming Week

NEW YORK (TheStreet) -- Next week's bank earnings stand to further support the optimists and give credence to economic doomsayers all at the same time. How the market will respond is anyone's guess, and the range of earnings estimates continues to reflect a wide disparity in opinion.

After large-cap bailout recipients threw investors for a loop with first-quarter results, the market appeared to have earnings fatigue for the second quarter. For instance, Wells Fargo(WFC Quote) shares soared following its prereport of a surprise $3 billion first-quarter profit. But its stock slumped after it reported its second quarter -- despite another big Street beat -- due to credit concerns.

JPMorgan Chase(JPM Quote) will be the first big bank on the earnings docket Wednesday morning, followed by Citigroup(C Quote) and Goldman Sachs(GS Quote) on Thursday and Bank of America(BAC Quote) on Friday. Wells reports on Tuesday, Oct. 20.

Estimates reflect analysts' unsurprising belief that Goldman and JPMorgan will be profitable, Citi will lose money, and Bank of America could go either way. Though Goldman has the most analyst coverage -- 23 provided estimates for a Thomson Reuters poll -- its profit range is narrowest, while the market is least certain about Citi and BofA's bottom-line strength.

"While credit measures will continue to deteriorate, investors will look to signs that suggest reserve build is nearing an end -- which we believe is unlikely," says Collins Stewart analyst Todd Hagerman in a report this week about third-quarter results. "Conversely, an outsized negative surprise tied to commercial real estate, combined with negative regulatory undertones, could easily trump the positive signs expected in consumer real estate this quarter."