Macro Briefing: 18 January 2023

* Americans have reduced spending in recent months: NY Fed survey
* US-China officials discuss economic relations
* China says it’s open for business after its Covid lockdown
* China’s economy looks poised for a rebound, predicts fund manager
* Record oil demand expected this year as China reopens, predicts IEA
* Fed asks big banks how they’re preparing for climate change
* Former economic adviser to Trump says US has ‘weathered’ economic storm
* UK inflation slips for second month but remains high at +10.5% in December
* Fund managers’ allocation to US equities falls sharply in January: BofA survey
* NY Fed Manufacturing Index falls deeper into the red in January:

US stock market’s recent rise in valuation looks like a new headwind for equities, according to Citi via The S&P 500’s trailing price-to-earnings ratio is back to 18.2x, “dangerously close to the upper end of our fair value range,” write analysts at the bank. “For now, we suspect valuation could put a near-term cap on upside momentum. Based on our fair value framework, valuations much above current levels are unsustainable unless there is a significant change in the macro backdrop.”