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.Alma En Pena. Boots - Women Alma En Pena. Boots online on YOOX United Kingdom - 11557987HP , 3.1 Phillip Lim Sandals - Women 3.1 Phillip Lim Sandals online on YOOX United Kingdom - 11199439RWL' Autre Chose Boots - Women L' Autre Chose Boots online on YOOX United Kingdom - 11460288UI , Gianvito Rossi Ankle Boot - Women Gianvito Rossi Ankle Boots online on YOOX United Kingdom - 11492634GG , Todai Ankle Boot - Women Todai Ankle Boots online on YOOX United Kingdom - 11480621BWFLUCHOS 247 CASUAL SHOES FOR MANLadies Black/White Goddess Platforms Bright colors , MISS Fendi Peach Sandals Excellent performanceConverse All Star Ctas Hi Canvas Seasonal Colors - Sneakers - Women Converse All Star Sneakers online on YOOX United Kingdom - 11445786IHIvy Kirzhner Flip Flops - Women Ivy Kirzhner Flip Flops online on YOOX United Kingdom - 11197640AU , Lowa RENEGADE GTX - Walking boots , Adidas Pier One Slip-ons - grey , men/women Earth Wanderlust Heels Clearance price , TWINSET High heeled sandals Colour: nero/bruciato , BOSS HOME - Slippers Colour: black , man/woman Berlin loafers , black, Coolway Shoes Breathable shoesMen/Women Tabitha Simmons Harlow Heels Economical and practical , Adidas Glamorous Classic ankle boots - redReplay Sneakers - Women Replay Sneakers online on YOOX United Kingdom - 11493699HT , men's/women's Stuart Weitzman Curvia Heels Make full use of materialsSergio Rossi Sneakers - Men Sergio Rossi Sneakers online on YOOX United Kingdom - 11567824XQ , Rodo Sandals - Women Rodo Sandals online on YOOX United Kingdom - 11520428UX , Espadrilles Ankle Boot - Women Espadrilles Ankle Boots online on YOOX United Kingdom - 11535814XP , Magrit Ballet Flats - Women Magrit Ballet Flats online on YOOX United Kingdom - 11569088OL , Vic Ankle Boot - Women Vic Ankle Boots online on YOOX United Kingdom - 11316169VD , Pedro García Sandals - Women Pedro García Sandals online on YOOX United Kingdom - 11573577RXPaloma Barceló Loafers - Women Paloma Barceló Loafers online on YOOX United Kingdom - 11502920DRDifferent styles and styles Adrianna Papell Cannes , Étoile Isabel Marant Beige Suede High Top Wedge 40/10 Women's Sneakers SneakersWOMENS Prada White Tracad Sandals special discount price ,
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.