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The data read on luxury and collectibles, for systematic investors. Today's signal: the listed watch and jewelry retailers were among the hardest hit in a broad, macro-driven selloff, yet the resale market for the very same goods sits at its cycle highs. The gap between the listed retailers and the auction prices their customers actually pay widened again today.
Good evening. It's Tuesday, June 23. I'm Sharon, and this is Closing Price from ALT/FNDATA, the data read on luxury and collectibles.
This episode of Closing Price is brought to you by ALT/FNDATA, the market intelligence platform for insights on the luxury markets and related public equities. With our data sandbox, you can work directly with the dashboards and datasets behind today's signals to keep your finger on the pulse of the market and drive your competitive advantage. Book a demo at altfndata.com/book.
Today's signal sits in the watch and jewelry names. On a brutal day for risk, the listed watch and jewelry retailers were among the hardest hit anywhere in the market. And yet the resale market for those very same goods, the market our data tracks, is sitting at its cycle highs. That is the gap to watch: the listed retailers on one side, the auction prices their customers actually pay on the other. Today, it widened.
The selling was broad, and it was macro. The trigger was a hawkish shift in rate expectations: both Bank of America and Deutsche Bank said today that they now expect the Federal Reserve to raise interest rates in September. That sent the dollar to a fresh one-year high and the ten-year Treasury yield up toward 4.5 percent, and it set off a broad de-risking. The Nasdaq fell about 4 percent, gold dropped more than 5 percent to around 4,129 dollars an ounce, and oil fell nearly 5 percent. Almost nothing was spared except the dollar itself. Within luxury, the damage was uneven, and that unevenness is its own tell. The listed watch and jewelry retailers took the brunt. Watches of Switzerland closed down about 4 percent, Swatch off about 2 percent, and the American jeweler Signet down nearly 4 percent. The broad European houses were mixed: Richemont fell 2.2 percent and Burberry almost 6 percent, yet LVMH actually closed higher, by about half a percent. And the dispersion among the accessible American names was extreme, with Tapestry rising almost 5 percent while Capri fell almost 6 percent on the very same session. When two names in the same corner of a sector move ten points apart in a day, that is positioning and fund flows talking, not a referendum on whether people are buying luxury.
Now turn to demand, the part the equity tape cannot see. In the auction room, the watch and jewelry markets show none of the stress that the retailers' shares are pricing in. The most recent watch cycle set fresh records, including a Phillips New York sale that was the highest-grossing watch auction in US history, at 75.8 million dollars, and the top lots across our database continue to clear seven and eight figures. The retailers' shares fell today on the Fed and the dollar. The prices collectors actually pay did not move.
So the divergence is sharper tonight than it was last night. On Monday, the luxury names fell while the broad market rose. Today they fell along with it. But through both sessions, the watch and jewelry resale market held firm. The read is straightforward: the listed retailers are trading as a rates-and-currency instrument, while end-demand, as measured by resale, has simply not turned. And here is the test that matters, the one our data is built to answer. Watch the resale series. If resale prices for watches and jewelry begin to roll over, then the retailers' weakness is an early warning about demand, and you should respect it. As long as resale holds at these levels, a day like today is a rates story, not a demand story. The signal lives in that gap.
For the data behind today's signals, the ALT/FNDATA data sandbox gives you hands-on access to our market dashboards and proprietary datasets, so you can test the divergence yourself. Book a demo at altfndata.com/book, or reach us anytime at info@altfndata.com.
That's Closing Price for Tuesday, June 23. ALT/FNDATA provides data and analysis, not investment advice. We're back tomorrow. I'm Sharon, from ALT/FNDATA.
(ALT/FNDATA provides data and analysis, not investment advice.)
