Forecasting sectorial profitability and credit spreads using bond yields

Dan Saar, Yossi Yagil

Research output: Contribution to journalArticlepeer-review


While previous research has focused mainly on government bonds as economic predictors we provide evidence that corporate bonds can act as predictors as well. By analyzing data from the financial and industrial sectors, which are the main pillars of the economy, we show that corporate bonds can predict changes in corporate profits and stock price behavior in the sector they are affiliated with. In addition, the examination of the relationship between sectorial credit spreads and various states of the economy shows that the financial sector is more sensitive to economic deterioration than the industrial sector.

Original languageEnglish
Pages (from-to)29-43
Number of pages15
JournalInternational Review of Economics and Finance
StatePublished - 1 Jul 2015

Bibliographical note

Publisher Copyright:
© 2015 Elsevier Inc.


  • Bond yields
  • Credit spreads
  • Sectorial forecasting
  • Sectorial stock indices

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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