When the market falls and people feel less wealthy, this stock gets hit hard

“As financial volatility looms, we believe consumers will be more conscious of their spending, which can be a factor contributing to weaker auction sales,” Chen said in a note Thursday. “As consumers become less optimistic about valuation, they will likely hold back on putting their pieces up for auctions, leading to contracted supply gathering for Sotheby’s.”

Cowen also slashed its 12-month price target for Sotheby’s to $44 from $50. Shares of the premium auction house fell 2.5 percent to $40.02 in Thursday’s trading after the negative call.

“We believe supply gathering is key to Sotheby’s success and a combination of lower consumer confidence at the high-end, S&P 500 market volatility, and tough comparisons given prior years of solid momentum are all negatives for 2019,” Chen said.

Sotheby’s has suffered from weaker sales globally. Sales in Asia were down about 20 percent in October, while sales growth in continental Europe declined by 2.4 percent in 2018, Chen pointed out.

The slowing global economy is also putting more pressure on Sotheby’s and luxury sector stocks, he added.