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Your morning briefing on the luxury and collectibles markets. Today: Kevin Warsh's first Fed meeting signals higher rates ahead and sends stocks and gold lower; a $35M Picasso leads a cautious Art Basel; Christie's unveils the Jim Irsay Collection; and two fights break out over who really owns a work of art.
Good morning. It's Thursday, June 18. I'm Sharon, and this is Open Bid from ALT/FNDATA.
This episode of Open Bid is brought to you by ALT/FNDATA, the market intelligence platform for insights on the luxury markets and related public equities. With a membership, you can unlock access to dashboards, reports and cutting-edge insights to keep your finger on the pulse of the market and drive your competitive advantage. Learn more at altfndata.com/membership.
We begin with the markets, and the Federal Reserve. In his first meeting as chair, Kevin Warsh held interest rates steady, as expected, but indicated that nearly half of the Fed's policymakers now project at least one rate increase before the end of 2026. This was firmer than investors expected. Bond yields jumped and stocks fell on the prospect of higher rates. The Dow closed down about 1 percent, at around 51,500, and the S&P 500 lost about 1.2 percent, to around 7,420, as the optimism from this week's US-Iran deal gave way to a more sober view of where rates are heading.
The fallout is still rippling this morning. Gold, lately on a record run, has dropped to around 4,262 dollars an ounce; because it pays no interest, a higher-rate outlook makes it less attractive to hold. Oil has eased to around 74 dollars a barrel as the reopening of the Strait of Hormuz points to more supply. European luxury opened lower, following Wall Street: LVMH, ticker MC in Paris, down about 0.8 percent, Burberry in London down about 1.2 percent, with Hermès, Kering, and Richemont modestly lower. Two signals from abroad matter for the sector. China is still luxury's most important growth market, so it is a worrying sign that a major Chinese stock index is now heading toward a bear market, weighed down by weakness in consumer and internet names. And in Japan, the yen is near its weakest level against the dollar in 40 years, which has traders watching for possible intervention, a move by Japanese authorities to step in and prop up the currency. For luxury, a weak yen has an upside: it makes goods in Japan cheaper for foreign visitors, so tourists have been flocking there to shop.
Two notes from the business side of luxury. Diageo, the world's largest spirits company and the maker of Johnnie Walker, has a new chief executive who, according to the Financial Times, is telling managers to cut jobs and costs, a clear signal of the pressure on the drinks industry now that the post-pandemic boom has faded. And Allbirds, the sustainable-sneaker brand once celebrated as a Silicon Valley success story, has sold its brand assets to the licensing firm American Exchange Group, a quiet end to its run as an independent company.
A couple of quick notes for collectors. On the car side, Bentley has unveiled a one-of-100 bespoke Continental GT S, and a firm called Evoluto has built a restomod of the 1990s Ferrari F355, limited to 55 cars. We will have more on both in today's Auto Market. And in Los Angeles, the third annual Open House gathering brought independent watchmakers and collectors together, more evidence of the energy building around the independent end of watchmaking, the very corner of the market that has been setting records at auction.
Turning to the art world, attention this week is on Switzerland, where Art Basel is now in full swing. Despite the cautious mood, buyers have been active at the top end, snapping up blue-chip works, and a Picasso led the early sales at around 35 million dollars. For some perspective on that figure, consider the ceiling for the artist. In the ALT/FNDATA database, the most valuable Picasso ever sold is Les Femmes d'Alger, which brought 179.4 million dollars at Christie's. So even a 35 million dollar Picasso sits comfortably within the artist's range. One small but telling note from the fair: the prize for emerging artists was quietly cancelled this year, a reminder that while the trophy market stays firm, the support for younger talent tends to feel the squeeze first.
Two stories this week turn on a single question: who really owns a work of art. In Mexico, the government has formally urged Sotheby's to halt the sale of two pre-Columbian artefacts, arguing they are part of the national heritage and should never have reached the block. And in a long-running restitution case, the dealer David Nahmad has been given 30 days by a court to return a Modigliani painting that was looted by the Nazis. Taken together, they are a reminder that provenance, the documented history of who owned a piece and how, is becoming as valuable as the work itself.
Staying with the saleroom, Christie's has unveiled a landmark sale: the Jim Irsay Collection, titled Icons of History. Irsay, the late Indianapolis Colts owner, was one of America's most committed collectors, and the sale's final lot is a striking one. It is the original working manuscript of Alcoholics Anonymous, the book that launched the 12-step movement and became one of the most influential texts of the 20th century. It is the sort of cultural document that very rarely reaches the market, and it speaks to a growing appetite among collectors for objects with deep historical resonance.
A few more developments worth noting. The Obamas have unveiled their first official painted portrait together, by the artist Njideka Akunyili Crosby, timed to this week's opening of the Obama Presidential Center in Chicago. In whisky, the cult Scotch distillery Old Pulteney has released its oldest and most expensive bottling yet, a 50-year-old single malt, while in Louisiana, Bayou Rum is reformulating its recipe as it tries to recover after its parent, the Stoli Group, filed for bankruptcy. And in fashion, the designer Jonathan Anderson has been added to Dior's permanent exhibition space in Paris, an unusual honor that places him among the house's historic names.
On the calendar, Art Basel runs through the weekend, and the market will be watching closely to see whether its strong start holds up against this more hawkish backdrop from the Fed.
That's it on Open Bid for today, Thursday, June 18. Our weekly Auto Market show publishes later today, and Closing Price follows this evening at 5 PM Eastern.
For insights on the data behind today's stories, the ALT/FNDATA membership gives you access to a rich library of market data dashboards, reports and insights. Get started at altfndata.com/membership or reach us anytime at info@altfndata.com.
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I'm Sharon, from ALT/FNDATA. I'll talk with you in the next episode.
