Thursday was an interesting day in the markets as the Nasdaq Composite Index gave back 2.05%, its worst day since March 9 (also down 2.05%) as growth had a challenging day. Indeed, large growth as measured by the Russell 1000 Growth Index (down 1.85%) was outperformed by the Russell 1000 Value Index (up 0.56%) by 241 basis points. Meanwhile, the S&P 500 (down 0.68%) had an easier time while the Dow Jones Industrial Average (up 0.47%) bucked the trend. It is not often you see that kind of action.
Tesla (TSLA) was a part of the Nasdaq's problem given the stock's 3.75% weight in the index as it dropped nearly 10% Thursday after the company reported second-quarter earnings on Wednesday following the market close. While Tesla's earnings per share of 91 cents were nine cents better than consensus and revenue of $24.93 billion was $200 million better, concerns about the second half of the year sent investors to the sidelines. This makes my recent swap of Tesla for Walt Disney DIS look a bit better, at least for now.
Elsewhere, in Smallville, there finally was some potentially good news for Vintage Wine Estates (VWE) , a disaster that has dragged down the results of my 2023 Tax Loss Selling Recovery Portfolio. Vintage Wine provided some guidance for 2023 (revenue of $290 million) and 2024 ($250 million-$270 million) and gross margins (30%-32% for 2023, increasing to 37%-39% in 2024). The wine producer has been cutting costs and simplifying its business by reducing SKUs as it attempts to get back to profitability. Vintage Wiee also named a new CEO, Seth Kaufman, currently CEO of Moet Hennessy North America, who is expected to take the helm by the end of October. He has his work cut out for him. VWE is down 67% year to date and trades like an option on whether the company will make it.
Overall, publicly traded wine stocks have not been kind to investors so far in 2023. In addition to VWE's awful performance, Duckhorn Portfolio (NAPA) (down 21%), Treasury Wine Estates (TSRYY) (down 5%) and Willamette Valley Vineyards (WVVI) (down 1%) are also in negative territory. Crimson Wine Group (CWGL) (up 19%) is the exception at this point.
