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.Reebok Workout 85 Txt - Sneakers - Men Reebok Sneakers online on YOOX United Kingdom - 11538613PV , Alberto Fermani Sandals - Women Alberto Fermani Sandals online on YOOX United Kingdom - 11378057CT , Nike Women's Air Max 90 Pinnacle Sneakers. Leather Synthetic and Mesh Upper For Comfort and Style. Style/Color: SneakersNike Blue New In Box 2015 Airmax Clear Bubble 705457 Running Exercise Gym Sneakers 6.5y Women's SneakersBasket Heart Mimicry Women’s Sneakers | Puma Black-Puma Black | PUMA Lows | PUMA United StatesJolie By Edward Spiers Ankle Boot - Women Jolie By Edward Spiers Ankle Boots online on YOOX United Kingdom - 11539977IXOfficine Creative Italia Ankle Boot - Women Officine Creative Italia Ankle Boots online on YOOX United Kingdom - 11165538ENNike Air Huarache Run Ultra - Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11099343JLWomen's Steve Madden Cobalt Sneakers High quality productsPublic Desire VOLT - High heelsmens/womens LifeStride Puddle Boots Fine processingman/woman K-SWISS SLIDE - Mules Customer firstman/woman Eric Michael Paris Boots a lot of varieties , Palladium | Palladium SUB Black Textile Flatform Sneakers , Be Mine | Be Mine Bridal Ayisha Ivory Satin Embellished Block Heeled Sandals , Under Armour ULTIMATE SPEED NM - Sports shoes - black/charcoal , Elia Maurizi Sneakers - Men Elia Maurizi Sneakers online on YOOX United Kingdom - 11358301IL , Msgm Sneakers - Women Msgm Sneakers online on YOOX United Kingdom - 11168916NF1725.A Loafers - Women 1725.A Loafers online on YOOX United Kingdom - 11569909GG , Isabel Marant Blac Wedge Sneakers Sneakerslow cost Bogs Amanda Slip-On Boot , Fine wild Me Too Zayden , Arche Lamour Please note: If you normally wear a 1/2 size, Arche recommends ordering the next size up. So if you wear an 8 1/2, please order a 9.