Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) will not report second quarter results until late July. But there's been an unusual amount of analyst activity regarding the bulge bracket banks, still the biggest brands in investment banking.

Research analysts have been pretty awful recently when it comes to bank earnings. So for what it's worth, analysts on average are expecting a big drop in Goldman Sachs' earnings, to $2.36 per share from $4.93 a year ago. As for Morgan Stanley, analysts are expecting 50 cents per share, compared with a loss of $1.10 a year ago.

Reuters notes that analysts with the best track records are even more pessimistic. Goldman earnings could fall 8.5 percent below Wall Street estimates according to StarMine's SmartEstimate, which weights estimates according to analysts' accuracy. Meredith Whitney (Meredith Whitney news) just slashed her estimates for Goldman Sachs. While some are bullish long-term, the short-term uncertainty is substantial. The once-bountiful bond market rally is throwing off less revenue. Trading in general will be less profitable, as will investment banking, despite some decent IPO activity.

Morgan Stanley has made a strong push to re-engage in trading, where Goldman Sachs has stolen the momentum as of late. But the timing may not be working out so great. The uncertainty--over regulatory reform as well as core issues--has weighed on the stocks. Besides, some think that Goldman Sachs is currently undervalued. JPMorgan has raised it to overweight.

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