Could stock market volatility hit New York’s art auction sales in May?
During the last financial crisis in 2008, the art market responded to the stock market with a lag of about seven months
Until January, the stock market was on an almost-unbroken bull run for nine years.
Now that run appears to be ending, and prominent members of the financial community are warning about the possibility of a significant correction, leaving people in the art world wrestling with whether this will affect their sales.
All I can tell you is that if there’s a [stock market] correction, I want to be owning a Picasso
A decade ago, during the last financial crisis, the art market responded to the stock market with a lag of about seven months.
The United States global investment bank Bear Stearns collapsed in March 2008, but the May auctions in New York that year set records.
Sotheby’s held its largest sale ever; over the course of two weeks, US$1.56 billion worth of art changed hands.
“By April 2008, we knew that the seams [of the stock market] were coming apart,” says Asher Edelman, a financier-turned-art dealer who founded the company ArtAssure.
“Everyone who was buying and interested in art was thinking, ‘Oh, this is kind of a safe thing to do’, and they didn’t pay attention to what was happening in the market.”
By the time the November auctions rolled around, the financial services firm Lehman Brothers had filed for bankruptcy, the stock and bond markets had plummeted, and the art market had imploded.