A banana duct-taped to a wall first sold in 2019 for $120,000. It could fetch up to $1.5 million this week during a Sotheby’s auction.
More than 1,600 auction lots this week are estimated to fetch more than $1 billion — including Maurizio Cattelan’s “Comedian” (the duct-taped banana), Andy Warhol’s “New York Skyscrapers” and Rene Magritte’s “Empire of Light,” offered by major auctioneers Sotheby’s, Phillips and Christie’s.
Artists and art dealers are hoping the sales will spark a turnaround from 2023, when the market for sales of high-end art contracted 27% from the year before — the first such decrease since 2020, according to Merrill Lynch.
And the sales could also be a test of how the wealthy are feeling about the economy, both present and future, after President-elect Donald Trump clinched a second term just a few weeks ago.
Alex Glauber, founder of AWG Art Advisory and president of the Association of Professional Art Advisors, told CNN that Trump’s victory is “likely to inject some vigor and momentum back into the market.”
That’s because many of the former president’s policies in his first term helped the wealthy get even wealthier — the kinds of customers who will be shopping at the upcoming art auctions.
“The economic policies that disproportionately benefit the wealthy should catalyze demand on both the primary market for emerging talent and secondary market for more established and branded artists,” Glauber said.
Art on the auction block
A little more than half of Phillips, Christie’s and Sotheby’s sales — which will carry the three aforementioned art pieces — were based in New York, where 34 of the top 50 auction lots were sold in 2023, according to an Art Basel and UBS Art Market Report.
Christie’s is auctioning 689 lots this week as part of the November art auctions. It is estimating sales of up to $796 million. “Empire of Light,” by Belgian surrealist René Magritte, is expected to fetch at least $95 million at Christie’s.
“It is poised to set a new record for the artist and establish a new benchmark for the entire Surrealist movement,” said Marc Porter, the chairman of Christie’s Americas. “This sale truly presents collectors with a once-in-a-lifetime opportunity, and we look forward to seeing how our clients respond.”
That kind of purchase takes deep pockets — even as spending by those kinds of customers dropped last year. The average amount spent on art by high-net-worth individuals dropped 32% in 2023 year-over-year, according to the Art Basel and UBS Survey of Global Collecting report.
Still, the incoming Trump administration has touted tax breaks, which could bode well for auctions of expensive collectibles and alternative assets, like art.
Tax cuts under the first Trump administration are set to expire in 2025, but he could extend them during his second presidency. Already, speculative assets like cryptocurrency have surged on expectations of a friendly Trump White House.
But Todd Levin of Levin Art Group was skeptical that tax cuts would do much for the art market. Tax cuts might help a little but otherwise wouldn’t make a big difference, he said, for the kinds of ultra-wealthy people who collect art.
“It’s not going to have an outsize difference in terms of your financial strategy,” he said.
Interest rates
Another drag on the art market over the last few years: high interest rates. The Federal Reserve raised rates to a two-decade high to combat pandemic-era inflation. Only in September of this year did the Fed finally beginning cutting.
“When (interest rates) come down the market heats up as capital is inexpensive and collectors look for hard assets as a store of value,” Glauber said. “However, that could be short-lived if they trigger a resurgence of inflation further exacerbated by the proposed trade policies.”
Doug Woodham, an art advisor and former president of Christie’s Americas, said the same investors who benefited from Trump’s tax cuts in his first term could be hopeful for an extension under a second Trump presidency — and for lower interest rates to help push economic growth.
That would likely increase wealth for those invested in stocks, real estate and other assets, “that people can choose to spend however they want,” he said — including on art.
A signal for what’s to come
New York’s art auctions in the spring and fall could be a sign of things to come for the global art market, according to Woodham. The stock market has seen a rally since the election, fueled by expectations of pro-business policies under Trump.
While Glauber said the art industry will ultimately be impacted by interest rates and the potential for inflation to come back, he said the sentiment at the November auctions is strong.
“For now, there is definitely a palpable energy and renewed sense of optimism in the market heading into the auctions and Miami art fairs that close out the calendar year for the art world,” Glauber said.
But Amy Whitaker, an associate professor of art and economics at NYU Steinhardt, said the effects of the US presidential election results on the November auctions can be noisy and hard to pin down.
Rather, she said the auctions offer a chance to reflect on the artists and how their works ended up on sale — perhaps more meaningful than the price tag on the art.
“I think it’s fair to say that the purpose of ‘Comedian’ is to call attention to the whole context in which that work is shown,” Whitaker said.
