For many investors, the growing threat of a slower-than-expected global economic recovery has overshadowed the run-up to a key economic indicator: corporate earnings.

This week marked the end of the first half of the year and the end of the fiscal second quarter. Alcoa will unofficially kick off earnings season when the aluminum giant releases results on July 12.

Although many investors have been disheartened by new growth projections from China and increased bank oversight in Europe, some industry watchers say earnings could put a lid on talk about a double-dip recession or the idea that things are going to get significantly worse before they get better. Then again, if companies don t inspire confidence with their take on the what s to come, they could cause more trouble in the market.

Here s what two market watchers are saying.

Who s talking: Jack Ablin, chief investment officer at Harris Private Bank

The gist: Anyone worried about a self-sustaining economy certainly has to worry about earnings, spending and hiring, Ablin says. Clearly we re disappointed on hiring, but if there s enough spending and earnings it could turn this cyclical downturn around.

Analysts are expecting significant growth, but they have lowered the bar a bit. Second-quarter earnings for S&P 500 companies are expected to be up 33% over the same quarter in 2009. About a month ago, analysts had expected 35% growth, Ablin says.

Ablin and others expect that most companies are likely to top estimates again, but what remains to be seen is how many soften their outlook. The same economic concerns weighing on investors may have swayed chief executives into a more conservative stance. Ablin says that although two-thirds of companies might beat estimates, three-quarters are likely to soften their projections.

Those outlooks are significant because they are integral to hiring, a main driver for the recovery. Before the release of Friday s monthly unemployment report, the most recent data had shown that companies increased their hiring of temporary employees. That s generally considered an indication of job growth to come, but the transition from temporary to full-time employees with benefits has yet to happen, Ablin says. So jobs will be a focal point in earnings announcements. Maybe the best way to say it is if they were really optimistic, they d be hiring, he says.

Who s talking: Jeff Saut, chief market strategist at Raymond James

The gist: Earnings will look good next to their year-ago comparisons through the fourth quarter. If they come in as expected, they could quell fears of a double dip.

About half of economic reports exceeded expectations this quarter, compared with a three- or four-quarter stint during which there were more positive surprises than letdowns, says Saut, adding that leading indicators have gone negative. It s telling you that things are softening up, he says. The question is if this is a soft spot you d [normally] get after an economic surge and it stabilizes and reignites, or are we going to go into a double dip? he says.

The market is being tested. Retail investors are starting to hear the word crash more often, as it s thrown around recklessly, he says. But it would take a 20% decline in a day to warrant the term crash, a scenario he doesn t see coming. If earnings come in around the current estimates, they won t be indicative of the necessary conditions for a crash.