Billionaire Leon Cooperman advised investors on Wednesday to stay away from bonds as they are in a bubble.
“My world is cash and stocks. I think bonds are the bubble, not stocks,” Cooperman told CNBC’s “Halftime Report.” He also noted investors should buy stocks they see as “fundamentally cheap” after a recent decline in equities.
Cooperman’s comments come after the benchmark 10-year note yield rose to 3.261 percent last week, its highest level since 2011. The sharp rise in rates spooked investors across the globe, with world equities falling sharply last week.
The Federal Reserve dropped its overnight interest rates to zero in the aftermath of the financial crisis as it tried to jumpstart the U.S. economy. This pushed yields down to historical lows, thus sending bond prices higher and to levels that some investors like Cooperman say reached bubble proportions. Now the Fed is reversing these policies by rising interest rates and trimming its balance sheet. The central bank has already hiked rates three times this year and is forecast to raise them once more before year-end.
Investors were worried that a rise in rates would lead to higher borrowing costs and thus slow down the global economy.
Cooperman, the CEO of Omega Advisors, said the market can handle higher interest rates, however, as there are no signs of a recession looming.
“The economy, if anything, is too strong,” Cooperman said. “The economy is on fire … The conditions that normally lead to a big decline just aren’t present.”
Cooperman’s comments come as U.S. stocks try to recover from a 4.1 percent decline last week amid worries about higher rates, tech valuations and fears of a global economic slowdown.Coral Blue Open-Toe Mules - Women Coral Blue Open-Toe Mules online on YOOX United Kingdom - 11525176HIConverse All Star Sneakers - Women Converse All Star Sneakers online on YOOX United Kingdom - 11580655OTGuess By Marciano Boots - Women Guess By Marciano Boots online on YOOX United Kingdom - 11535664VVPedro García Flip Flops - Women Pedro García Flip Flops online on YOOX United Kingdom - 11171273VU , Eqüitare Ankle Boot - Women Eqüitare Ankle Boots online on YOOX United Kingdom - 11505319MB , Swedish Hasbeens Zip It Shearling BootVans U Authentic Brite Neon Pi - Sneakers - Women Vans Sneakers online on YOOX United Kingdom - 11140242FRWOMENS Gianni Bini Cognac Wedges Different products , Kennel + Schmenger LOVE - Mules , mens/womens Rieker D0200 Loafers Lightweight shoesZign Slingback ballet pumps Colour: blackGentle Souls by Kenneth Cole Serella , Adidas Lazamani High heeled ankle boots - brownPuma TSUGI BAROQUE - Trainers - laurel wreath/black/whitemens/womens PERLATO Classic heels Colour: kiss modern , Premiata Boots - Men Premiata Boots online on YOOX United Kingdom - 11530867XP , Manuel Barceló Sneakers - Men Manuel Barceló Sneakers online on YOOX United Kingdom - 11518919FW , adidas Performance KAISER 5 TEAM TF - Astro turf trainers - black/running whitemen's/women's Nine West Sinchi Boots Highly praised and appreciated by the consumer audienceMen/Women Crocs CitiLane Roka Metallic Slip-On Sneakers & Athletic Crocs leading the fashionAlbano Court - Women Albano Courts online on YOOX United Kingdom - 11527300ME , L'arianna Ankle Boot - Women L'arianna Ankle Boots online on YOOX United Kingdom - 11298855SAMax Mara Sneakers - Women Max Mara Sneakers online on YOOX United Kingdom - 11554937NR , excellent quality Merrell Siren Traveller Q2 , excellent quality Tabitha Simmons KikiHarley-Davidson Senter The heritage-inspried Harley-Davidson Senter boot lets you release your stylish inner rebel.