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.Janet Sport Ankle Boot - Women Janet Sport Ankle Boots online on YOOX United Kingdom - 11258890CPSKECHERS Work Sudler - Mabscott SRJ|D Julie Dee Ankle Boot - Women J|D Julie Dee Ankle Boots online on YOOX United Kingdom - 11508490UB , Creation Of Minds Ankle Boot - Women Creation Of Minds Ankle Boots online on YOOX United Kingdom - 11553559XJMarc By Marc Jacobs Sandals - Women Marc By Marc Jacobs Sandals online on YOOX United Kingdom - 11532413XR , Shop ★ Art Sneakers - Women Shop ★ Art Sneakers online on YOOX United Kingdom - 11501836JH , woman David's Bridal Silver Formal Shoes Guarantee quality and quantity , YOKONO Brusel 022 FASHION ANKLE BOOTS FOR WOMENPeter Kaiser HERDI - High heelsmen/women Nina Elenora Heels Different goods , men's/women's Alegria Keara Sandals Adequate supply and timely deliveryman/woman Frye Lee A Line Loafers Lush designHogan Sneakers - Women Hogan Sneakers online on YOOX United Kingdom - 11285516ME3:10 Sneakers - Men 3:10 Sneakers online on YOOX United Kingdom - 11556059IEmens/womens Frye Gates Woven Slip-On Sneakers & Athletic Frye selling priceFratelli Rossetti Loafers - Men Fratelli Rossetti Loafers online on YOOX United Kingdom - 11440579XQmens/womens Chinese Laundry Briella Boots Highly appreciated and widely trusted in and outCafènoir Sneakers - Women Cafènoir Sneakers online on YOOX United Kingdom - 11380587GORockport Sneakers - Women Rockport Sneakers online on YOOX United Kingdom - 11511622MVLove Moschino Sneakers - Women Love Moschino Sneakers online on YOOX United Kingdom - 11310850BFDonna Più Sandals - Women Donna Più Sandals online on YOOX United Kingdom - 11464387SP , Havaianas Flip Flops - Women Havaianas Flip Flops online on YOOX United Kingdom - 11496851CLCharlotte Olympia Sneakers - Women Charlotte Olympia Sneakers online on YOOX United Kingdom - 11023644TK , Charlotte Olympia Court - Women Charlotte Olympia Courts online on YOOX United Kingdom - 11492580UF , Low price Massimo Matteo Loafer 17 , adidas By Stella McCartney White Women's Olivin Golf Chalk Twine Dune SneakersCOMME des GARÇONS Off White Converse Play Chuck Taylor Sneakersladies Ralph Lauren Denim Cecilia Wedges shopping onlineadidas By Stella McCartney Gray Festuca Sneakers , WOMEN Chloé Hunter Green Cyllia Wedges diversity ,
But Cooperman thinks stocks will bounce back from this decline as they are fairly valued. He also noted the market can handle higher interest rates.
“My central view is the market will be higher than it is today at year-end,” he said. “We’re in a zone of fair value and it’s going to take a recession or a change in the Fed’s posture” to get us out of that.