Todd Gordon Says Refining And Marketing Stocks May Face A Pullback As Crack Spreads Roll Over

According to CNBC, Inside Edge Capital founder Todd Gordon said refining and marketing stocks may be due for a pullback as the crack spread has weakened, even after the group posted a 108.7% return. He said the VanEck Oil Refiners ETF (CRAK) has outperformed the underlying spread, while three refiners — Marathon Petroleum (MPC), Valero Energy (VLO) and Phillips 66 (PSX) — accounted for 15.8% of the Energy Select Sector SPDR Fund's weight and contributed 17.2 percentage points of the fund's 48.5% total return. Gordon also said West Texas Intermediate crude was pushing back above $90, the 2-year yield and fed fund futures spread had widened to 64 basis points, and the market was pricing a 68.2% chance of a rate hike at the Sept. 16 meeting and a 97% chance of a 25 basis point hike by Oct. 28. He said he is looking to add ConocoPhillips (COP), which he said was breaking out through $135 and had just printed $136.19.