The new year has started well, with solid economic growth, moderating inflation and positive markets. The large majority of our companies have reported good numbers for the fourth quarter of last year and constructive outlooks for this year. As we highlight below, it is not just our positions in technology leaders like Nvidia and ASML but broad-based ongoing resilience and turnaround in consumer companies like LVMH and Givaudan or industrial companies like Eaton. This resilient economic and market environment is what we have been expecting based on what we know from the companies we invest in.
The geopolitical and macroeconomic environment will continue to be challenging. Conflicts and elections will dominate the headlines all year. However, two things give us confidence. First, markets have taken over from the central banks in setting interest rates, with US ten-year treasuries off from the peaks of last year and at levels that appear to us to be consistent with the macro-economic environment. Second, moderating inflation has allowed the US Fed to provide clear guidance for rate cuts, which provides visibility for businesses and consumers, and will support capital investment and valuations.
We invest in globally leading companies that have great quality and can generate strong compound returns over time. We believe that sustainability is one of the important attributes of quality and that it can be a great source of opportunity for investors. We do all of our own work on company fundamentals, valuation and sustainability and think it is just common sense: only companies that are sustainable in the way they go about their business can have a sustainable competitive advantage and generate sustainable returns over time.
As we highlight in our Investment Insight this month, we have fully integrated sustainability into our investment approach and continued to improve what we do. It has allowed us to find great companies that have generated strong returns because they are benefitting from providing solutions to some of the big problems we face, and to engage with them to have a positive impact. You can read our Insight by following the link here or clicking on the attachment.
Long-term investors have been rewarded by focusing on strong fundamentals and attractive valuations, and not getting distracted by headlines and market fluctuations. Volatility is an opportunity for long-term investors and we will look to take advantage of any that we find compelling.