Global macroeconomic headwinds increasingly mount, such as high inflation, quantitative tightening by central banks, elevated cross-asset volatility, increasing recession odds, and the Russia-Ukraine war, as the new year quickly approaches. 

A few days ago, we pointed out that the newly minted crypto millionaires who panic-bought luxury vehicles are dumping Mercedes G-Wagons and McLaren supercars as crypto winter worsen with the implosion of FTX. And possibly the selling is spreading to other luxury items such as watches. 

Besides fancy vehicles, fast money bought watches during the pandemic boom, and lots of them. Prices for Rolex, Patek Philippe, and Audemars Piguet soared to astronomical levels, but as stocks, bonds, and crypto entered bear markets earlier this year, these watches began to drop in value. Earlier this year, we pointed out the top in the watch market in a note titled "Investors' Clock Out' Of Rolex Bull Market As Demand Cools." 

Now the Subdial50 index, an index tracking the top 50 most traded second-hand luxury watches on the pre-owned market, is making new lows, and according to Bloomberg, "has fallen to levels not seen since before an unprecedented boom in 2021 and early 2022." 

The decline shows the most sought-after watches from the top Swiss brands haven't been able to maintain lofty prices hit during the pandemic when cash-flush consumers stuck at home snapped up Patek Nautilus, Audemars Piguet Royal Oaks and Rolex Daytonas in a frenzied search for the next hot asset class. Dominated by Rolex references including the Daytona ceramic bezel chronograph and GMT Master II, the Subdial50 Index has declined by almost 5% in 12 months and nearly 17% in half a year.

The falling demand coincided with declines in technology stocks and the crash in cryptocurrencies.

Secondary market prices for the Royal Oak "Jumbo" reference 15202 soared above £110,000 ($134,840) at their peak in March, more than doubling over 12 months. Now the watch is trading at around £70,000. -Bloomberg 

Boom/bust chart of the luxury watch market. 

And with the economy headed for more turmoil next year, as Citi chief economist Nathan Sheets warned this week to clients, that could mean watch prices have yet to hit bottom.