FANG vs XOM 20-session forward spread after 2y yield surge with positive Brent tape
The thesis sounded reasonable: a jump in the 2-year Treasury yield should squeeze a high-beta E&P name harder than an integrated major, especially with crude already bid. The tape disagreed. Across the 40 sessions since 2023 that fit the setup, FANG beat XOM over the following 20 days by an average of 1.36%, not lagged it.
Both names drifted lower in those windows, but XOM did the heavier lifting to the downside, off 1.39% versus roughly flat for FANG. FANG trailed in only 42.5% of cases, and the gap against ordinary days carries a p of 0.024 — suggestive, though the spread against zero alone is softer.
What that means for the rate-and-crude logic, and where it breaks down, is laid out in the full analysis below.
Over the past ~3 years, when the 2-year Treasury yield rises by at least 30 basis points over the prior 20 trading days while Brent crude's 20-day return is positive, does FANG underperform XOM over the next 20 trading sessions? I expect higher short rates to compress high-beta E&P multiples while the supermajor holds up on integrated cash flows, so FANG lags XOM until the crude tape stabilizes.
How this was measured
Daily closes were built from minute bars for FANG and XOM and aligned on common sessions. The trigger uses the 2-year Treasury yield change over the prior 20 equity sessions (lagged one session for the T+1 macro release convention) and Brent crude's 20-session return, also lagged one session. A condition day is defined as 2y change >= 30 bps and Brent 20-session return > 0. For each condition day, the next 20-session forward return was computed for FANG and XOM close-to-close, and the FANG-minus-XOM spread was tested against zero and against all other days.
The key numbers
Reading the numbers
The 40 trigger days show FANG outperforming XOM by about 1.36 percentage points over the next 20 sessions, not underperforming; XOM averaged -1.39% and FANG roughly flat. The single-sample result is borderline (p=0.087), and the median edge is smaller at 0.62%.
The charts
This bar chart shows the average next-20-session return after the dual trigger: FANG is essentially flat at -0.04%, XOM is down 1.39%, and the FANG-minus-XOM spread is positive at +1.36%. The bar to focus on is the rightmost one: a positive spread means FANG outperformed XOM, which directly contradicts the expected FANG lag. The edge is modest in absolute terms, with FANG still slightly negative, so it is not a case of FANG rallying strongly.
This box plot compares the FANG-minus-XOM 20-session spread on the 40 condition days against the other 621 sessions. The condition group averages +1.36%, while other days average -0.53%, and the condition range runs from -7.11% to +13.66% versus -15.12% to +17.88% for other days. The key point is that the condition box sits higher, not lower, than the other-days box, meaning the setup tended to favor FANG over XOM; the overlap and limited 40-day sample mean this is not a clean, one-way signal. The report's condition-vs-other test (p=0.0243) suggests the gap is unlikely to be pure chance by conventional standards, but its direction is opposite the thesis.
This histogram shows the spread of the 40 conditional FANG-minus-XOM 20-session outcomes. Values stretch from -7.11% to +13.66%, with an average of +1.36%, and 42.5% of trigger days had FANG underperforming XOM. The important thing is that the average is positive and the median is also positive at 0.62%, so the typical conditional outcome was FANG holding up better than XOM, not worse. The spread is wide, so any single trigger day can still go either way.
Forward-spread summary
| Group | N | Mean | Median | Std |
|---|---|---|---|---|
| Condition met | 40 | 0.0136 | 0.0062 | 0.0489 |
| Other days | 621 | -0.0053 | -0.0048 | 0.0597 |
| All aligned days | 661 | -0.0041 | -0.0041 | 0.0592 |
Most recent 25 of 40 condition days
| Date | 2y chg (bps) | Brent 20d ret | FANG fwd20 | XOM fwd20 | FANG-XOM spread |
|---|---|---|---|---|---|
| 2024-04-26 | 42 | 0.0372 | -0.063 | -0.0306 | -0.0324 |
| 2024-04-29 | 37 | 0.0439 | -0.0236 | -0.0316 | 0.008 |
| 2024-05-01 | 34 | 0.0068 | 0.0138 | -0.0088 | 0.0226 |
| 2024-10-08 | 31 | 0.1295 | -0.0923 | -0.0213 | -0.0711 |
| 2024-10-09 | 39 | 0.1116 | -0.0561 | -0.0092 | -0.0469 |
| 2024-10-10 | 37 | 0.096 | -0.0621 | -0.0122 | -0.05 |
| 2024-10-11 | 34 | 0.0764 | -0.0659 | -0.0172 | -0.0487 |
| 2024-10-14 | 38 | 0.0894 | -0.0457 | -0.0132 | -0.0325 |
| 2024-10-23 | 54 | 0.004 | 0.0116 | 0.0059 | 0.0057 |
| 2024-10-25 | 47 | 0.0166 | 0.0016 | 0.0205 | -0.0189 |
| 2024-10-28 | 56 | 0.0557 | -0.0021 | 0.0149 | -0.017 |
| 2024-11-18 | 36 | 0.0096 | -0.1187 | -0.1024 | -0.0164 |
| 2025-05-29 | 31 | 0.0262 | 0.0347 | 0.0659 | -0.0312 |
| 2025-05-30 | 32 | 0.0194 | 0.0296 | 0.0568 | -0.0273 |
| 2026-03-20 | 32 | 0.5177 | -0.0415 | -0.0759 | 0.0344 |
| 2026-03-23 | 40 | 0.6278 | -0.0068 | -0.0791 | 0.0722 |
| 2026-03-24 | 40 | 0.4435 | -0.0083 | -0.0901 | 0.0818 |
| 2026-03-25 | 47 | 0.5225 | -0.0021 | -0.0792 | 0.0771 |
| 2026-03-26 | 39 | 0.5439 | -0.0403 | -0.0992 | 0.059 |
| 2026-03-27 | 54 | 0.5823 | -0.0302 | -0.1337 | 0.1035 |
| 2026-03-30 | 50 | 0.7032 | 0.0118 | -0.1248 | 0.1366 |
| 2026-03-31 | 35 | 0.5779 | 0.047 | -0.0826 | 0.1296 |
| 2026-05-18 | 38 | 0.1554 | -0.102 | -0.1165 | 0.0145 |
| 2026-05-19 | 35 | 0.1289 | -0.1053 | -0.1316 | 0.0263 |
| 2026-05-20 | 35 | 0.0801 | -0.1035 | -0.1169 | 0.0134 |
The takeaway
The answer is no — and the tape actually leans the other way. Across the 40 sessions where the 2-year yield rose at least 30 bps over 20 days while Brent's 20-day return was positive, FANG beat XOM over the next 20 sessions by an average of 1.36%, rather than lagging it. Both names were weak, but XOM was weaker: FANG came in roughly flat at -0.04% while XOM lost 1.39%. FANG underperformed in only 42.5% of the cases, so holding up better was the more common outcome, not the exception. The spread on ordinary days was -0.53%, and the gap between trigger days and the rest is statistically meaningful (p = 0.024, roughly a 2.4-in-100 chance of being luck) — just with the sign flipped from the thesis. Against zero alone the evidence is softer (p = 0.087, about 9 in 100), so treat this as a suggestive tilt rather than a proven rule. Net takeaway: a short-rate surge with a firm crude tape has not been a reason to expect FANG to trail XOM, and if anything it has marked relative FANG strength.
The fine print
- Only 40 trigger days, and their 20-session forward windows overlap — the p-values are flattering, not conservative.
- The 30bp / 20-day threshold and the positive-Brent filter are the user-specified rule; other cutoffs could change the answer.
- Single pair over one ~3-year window; this says nothing about the wider energy complex.
- Macro inputs are lagged one session and forward-filled onto the equity calendar, so the signal is slightly stale.