Mei Moses July Art Insights - World All Art Index Declines

The July Mei-Moses all world tracking index has just been released and unfortunately, the results are not overly positive.  Granted, the results are based on only 9 auction held during July as the art world typically slows for the summer months, but the decline was in fact large.  In fact the decline was large enough to impact and reduce the year to date compound annual return, falling from 7.9% at the end of June to 5.4% at the end of July.

Keep in mind this fall is before the U.S. debt downgrade the drastic declines in stock prices.  Given the July decline and the current economic uncertainty, the fall art season will certainly be one for personal property appraisers to watch and monitor for potential shifts in short term tactics and long term strategies in collecting.

The Beautiful Asset Advisors press release on the Mei Moses Index July results reports

The world art index based on the first two months of 2011 showed an increase of about 8 percent, reflecting good results in major old master (OLM19C) sales in New York in January followed by good results in major post war (PWC) and impressionist (IMPMOD) sales in London in February.  The financial indexes showed smaller gains in the same period.  In March, however, the picture changed dramatically.  Weak British painting (BRP) sales in London and poor results for the minor American, post war and impressionist sales in New York overwhelmed the strong traditional Chinese works of art (TCWA)  sale in New York.  When the dust settled, the world all art index was up less than 2% by the end of March.  The sales in April were only a slight improvement over March resulting in an increase of only 2.8% by the end of the month.  May sales saw a dramatic improvement with repeat sale information available for all of the collecting categories we study.   May started with above average results at the big IMPMOD and PWC sales in New York.  (Our reports on these sales are available on our website and thus we do not repeat their analysis here.)  These were followed in New York by weak American (AMP) and Latin American (LAP) results.  The end of the month saw four Asian contemporary art sales in Hong Kong with mixed results.  Two were quite strong and two were very weak.  May also had sales of BRP paintings in London and relatively small old master, impressionist and contemporary sales in Amsterdam, Paris and Milan.  Few of these sales produced above average results.  The only bright spots were two small TCWA sales which produced an average CAR of almost 50%.  When taken as a totality the May sales were sufficient to boost the index to a gain of 10.6 percent from the closing value of 2010.

Like May, June was dominated by the big IMPMOD and PWC end of month sales which took place in London rather than New York.  The beginning of the month saw smaller sales from most other collecting categories, except LAP and AMP, across Europe, Hong Kong and New York.  The month started on a bright note with a small very strong sale, average CAR of over 30% for the lots we had prior auction purchase prices for, of TCWA in Hong Kong.  At the same time in Paris there was an IMPMOD sale with good results, average CAR of about 8% and a set of very good Russian sales in London with average CAR of 10%.  The following week there was a group of OLM19C sales in New York which produced weak results, an average CAR below 2%.  These were followed by small sales in London of OLM19C, with an average CAR of 8% and a very strong BRP sale, with an average CAR of 13%. The main features of the last two weeks were the big IMPMOD and PWC sales in London.  We have reported in detail on these earlier and will not repeat the analysis here; they are available on our website, except to point out that all the IMPMOD sales were quite strong as were the night PWC sales.  However the day PWC sales were so weak that they helped reduce the overall return of the world all art tracking index from over 10% at the end of May to 7.9% at the end of June.

The auction market starts to wind down in July with the only sales being a group of OLM19C sales in London and a single BRP sale also in London.  The returns of the 185 pairs we added to our database were lackluster producing an average CAR of 4.2%. This poor result was sufficient to reduce the world all art tracking index from the 7.9% achieved at the end of June to 5.4% at the end of July.  However the equity indexes declined at a faster pace generating year to date performance of 3.5% for the S&P 500 TR and -0.5% for the FTAS TR indexes.

 For more information, subscribe (50% discount for appraisers) or to download the latest free press release on the July results, click HERE.

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