Test sales in New York

In a few days, Sotheby’s and Christie’s will hold their prestigious New York sales with works by the leading artists in impressionism and modern art up for auction. Tension is running high one week ahead of these major sales since they will effectively test the confidence of collectors in the face of the current economic uncertainty.

Of course, dollar weakness may provide a fillip for this blue-chip market, but it could be that caution carries the day and a brake is put on price rises at the high end.

Impressionism and post-impressionism did disappoint last November, particularly at Sotheby’s, when a Van Gogh was bought in whereas it had been expected to achieve more than USD 28 million and on which the auction house had agreed a guaranteed price. This mistake was sanctioned as of the following day, with a collapse in the Sotheby’s share price. One week later, the success of the contemporary art sales again underpinned collector confidence in proving that the market had remained strong.

For its Impressionist and Modern Art sale, Sotheby’s, whose stock price is trading at below USD 30 on Wall Street compared with above USD 57 in October 2007, is focusing more on modern art. Top of the bill: a spectacular canvas by Fernand Léger estimated at USD 35-45 million and an Edward Munch valued at USD 24-28 million. These two works again have minimum price guarantees as does the Christie’s headline lot, a Monet painting entitled Le Pont du chemin de fer à Argenteuil which is expected to raise close to USD 35 million. Even if these works have not come up for auction for decades, competition is pushing the two auction houses to again take significant risks.

The market will have to rise to another challenge: absorb no fewer than 11 major works by Alberto Giacometti in a matter of hours. The two rival sale rooms have each succeeded in bringing together major works by the Swiss sculptor, including La Place II and Grande femme debout II at Christie’s as well as Femme de Venise VII, a Buste de Diego and a canvas entitled Portrait de Caroline at Sotheby’s. True the artist did set a new record in May 2007 with L’homme qui chavire, a 1947 sculpture which sold for USD 16.5 million, compared with an estimated USD 6.5-8.5 million. True his price level again increased by +12% in 2007. True he has just been the subject of a major retrospective at the Pompidou centre in Paris. But is it possible, in the current environment, to sell works by Alberto Giacometti worth more than USD 70 million in just two days?

Having learned from the November sales, the two auction houses continue to bet on contemporary art, a real market driver. If demand is strong, in one week this sector could bring in close to USD 1 billion at the two auction houses, a new record sales volume and significantly more than the Impressionist and Modern Art sales. No fewer than 14 lots have estimates of USD 10 million and above. The exceptional estimate of USD 70 million for the headline lot, a 1976 triptych by Francis Bacon, would appear to ignore commentators who fear that the US economic recession is likely to affect the most speculative and volatile sector of the art market…