Along with the widely expected Fed rate cut, international markets are going to watch out for the results of the big four investment banks in the US after the turmoil brought about by the US sub prime crisis, reports CNBC-TV18.

>Analysts said it would be a glimpse into the health of the financial institutions. Lehman Brothers will be coming out with its results tonight and Morgan Stanley will do so tomorrow. Bear Sterns and Goldman Sachs will be following them on Thursday.

The market believes that Bear Sterns will bear the brunt, followed by Lehman Brothers. Goldman Sachs and Morgan Stanley have a huge diversification, so they might take a smaller cut.

>Analysts believe that it is very tough to estimate the results over the short term, as they do not know how much write-offs the companies will make. Even if they make the write-offs, they could do it over the quarters that follow.

>Also, these assets have to be marked to market. Over the last few days, there have been no active market, so the marked to market thing might be very difficult for these companies.

>There are various numbers floating around. Goldman Sachs might write down $3.1 billion (30 per cent of 2006 profits), Lehman Brothers $2.8 billion (25 per cent of 2006 profits) and Bear Stearns may write down $700 million (25 per cent of 2006 profits).

>It is expected that Bear Sterns may come out with profits, which are 40 per cent lower than last year, Morgan Stanley''s may be 10 per cent lower than last year, Lehman Brothers about 5 per cent lower than last year and Goldman Sachs will come out with a higher profit of 33 per cent, because of the sale of its power company.

Analysts added that it would be very interesting to see how these companies will come out with the results. By the end of the week, it will be known how bad the financial situation really is.

>Rate cuts in the past have led to major divergence in the way the markets have reacted. What will the trends throw up now?

Now, whether the market cuts the rates by 25 or 50 bps today and even cuts the discount lending window by another 50 bps, the market will surely get some direction from tomorrow and it will react.

also see : General reports on Banks & Financial Institutions