Earnings season is upon us, and expectations are running high now that there’s near universal agreement that the recession has ended.

Although comparisons to last year are still rather easy, retailers’ March same-store sales came in at the highest levels in over a decade thanks to warmer weather and an early Easter. Initial data indicates that same-store sales rose 9.2 percent from the preceding month, while total sales were up 11.4 percent from a year ago. Higher-end department stores accounted for much of this growth, an indication that consumers are becoming less price-sensitive and are willing to make discretionary purchases. A strong March raises questions about April, as the holiday typically ushers in a sales pop. If the numbers hold up, a good case can be made for a recovery in US consumption; if the numbers weaken substantially, expect subdued growth.

But companies appear to expect higher sales; inventories at wholesalers are on the rise, a clear indication that orders are ramping up. In February, wholesalers’ stockpiles rose 0.6 percent, and sales posted their eleventh consecutive increase, rising 0.8 percent.

Stock buybacks jumped 37.2 percent in the fourth quarter of 2009–another sign that optimism is on the rise. According to data from Standard & Poor’s, companies authorized share repurchases totaling $47.8 billion in the quarter. A number of firms also increased their dividend payouts in the first quarter, and several–including Starbucks Corp (NYSE: SBUX)–initiated dividend payments for the first time.

The willingness of companies to both reinvest in their own businesses and share profits with investors is a welcome sign of expected improvement after months of cash hoarding. And it appears that companies should have the earnings to back up this generosity; consensus estimates now call for an almost 30 percent increase in first-quarter earnings growth. At the same time, the quarters of easy comparison are nearing an end, putting the pressure on companies to grow earnings aggressively.

One worrying development is that investors’ risk appetite appears to be rising rapidly. UBS’ (NYSE: UBS) Risk Appetite Indicator reached 1.21 at the beginning of April, a sign that investors are willing to take on higher risks. And spreads between junk bonds and Treasuries have narrowed as investors gravitate toward high yields in the low-rate environment.

Although it’s tempting to jump on the bandwagon when things are improving, remember to be fearful when others are greedy.