Peak Picasso - Did The Art Market Just Flash A "Sell" Signal For Stocks

"Like any trend in an unhinged market, it's next to impossible to predict when the confidence will peak. Based on previous peaks, it could (should) be any time," warns Jason Goepfert, president of Sundial Capital Research.

As Bloomberg reports, Goepfert's recent note, analyzing the relationship between record art sales and the stock market, strongly suggests, "previous bouts of expensive art sales have indicated over-confident conditions in the stock market as well."

There is broad overlap between the markets, now more than ever. Wealth concentration is near an all-time high, and with stocks doing so well, it has helped to fuel massive confidence in other "greater fool" markets like art.

 

...The market is relatively isolated and a plateau in art prices wouldn't have much affect on broader assets, though it would likely be coincident with a plateau in stock and bond markets.

With the art market hitting a new milestone last week, perhaps it is time to consider reducing exposure to the exuberance.

Read more at Sundial Capital Research

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