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.Windsor Smith Ankle Boot - Women Windsor Smith Ankle Boots online on YOOX United Kingdom - 11262281ET , Mm6 Maison Margiela Sandals - Women Mm6 Maison Margiela Sandals online on YOOX United Kingdom - 11566578LM , Liu ?Jo Shoes Sneakers - Women Liu ?Jo Shoes Sneakers online on YOOX United Kingdom - 11314889MH , Metisse Ankle Boot - Women Metisse Ankle Boots online on YOOX United Kingdom - 11500315OBYOKONO Ibiza-068 SANDALIA PLANA DE MUJERPIKOLINOS 0545-pikolinos SANDALIA PLANA DE MUJERWOMEN Manolo Blahnik Tan Sandals Discount , Liu •Jo Shoes Espadrilles - Women Liu •Jo Shoes Espadrilles online on YOOX United Kingdom - 11548719TJTory Burch Vintage Vachetta - 209 Audra 45mm Sandal-vintage Mestico Sandals , RIVIERABONUCCI Sandalias Mujer Piel Ja324gc96-bicolor WEDGE-HEEL SANDALS FOR WOMEN , GADEA 41287 ZAPATO DE CU?A PARA MUJERladies Olcay Gulsen 1112 Platforms First quality , woman Stuart Weitzman Mermaid Sandals Exquisite workmanshipmen's/women's Calvin Klein Lorenzo Boots New marketAdidas Zign Cowboy/Biker boots - blackHavaianas FLASH URBAN - Pool shoesmens/womens Clarks Un Hearth Flats Various types and stylesMen/Women Buffalo Platform sandals Preferred boutique , Leather high heels , camel, La Redoute CollectionsCrisci Loafers - Men Crisci Loafers online on YOOX United Kingdom - 11454024QN , Dolfie Boots - Men Dolfie Boots online on YOOX United Kingdom - 11529131UXVans Sneakers - Women Vans Sneakers online on YOOX United Kingdom - 11552801RU , Dior Sneakers - Women Dior Sneakers online on YOOX United Kingdom - 11559966IC , Rochas Court - Women Rochas Courts online on YOOX United Kingdom - 11081863IG , Salvatore Ferragamo Sandals - Women Salvatore Ferragamo Sandals online on YOOX United Kingdom - 11528320LE , PegRbUHZ lady Vans Sneakers Excellent features , women Tory Burch Orange Roselle Sandals Every article described is available , women Dior Brown/Gold Bd1002 Sandals At an affordable priceWOMEN Jimmy Choo Gold Criss-cross Wedges New styleLADY Nike Purple-pink Air Max Sneakers Elegant ,
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.