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.Divine Follie Ankle Boot - Women Divine Follie Ankle Boots online on YOOX United Kingdom - 11562909ID , Le Ble Loafers - Women Le Ble Loafers online on YOOX United Kingdom - 11526048UHCALLAGHAN 16200 CASUAL SHOES FOR MANJ|D Julie Dee Ankle Boot - Women J|D Julie Dee Ankle Boots online on YOOX United Kingdom - 11016753BE , Janet & Janet Loafers - Women Janet & Janet Loafers online on YOOX United Kingdom - 11269331DPCLARKS Hidi Hope ZAPATILLAS SLIP ON DE HOMBRE , men's/women's Indigo Rd. Gamia Flats Modern designDorothy Perkins ELSA - Classic heels , Public Desire EMPIRE - High heeled ankle boots , Bogner SAAS FEE - High-top trainers Colour: anthraciteChloé Sandals - Women Chloé Sandals online on YOOX United Kingdom - 11520036TPDsquared2 Loafers - Men Dsquared2 Loafers online on YOOX United Kingdom - 11066472KUmen's/women's Steve Madden Icekap Sneakers & Athletic Steve Madden Crazy price, Birmingham , Chuck taylor all star ox studs leather trainers , black, ConverseLeather Crown Sneakers - Men Leather Crown Sneakers online on YOOX United Kingdom - 11537182RTAntony Morato Sneakers - Men Antony Morato Sneakers online on YOOX United Kingdom - 11548935TGVictoria Loafers - Women Victoria Loafers online on YOOX United Kingdom - 11578649DQCasadei Court - Women Casadei Courts online on YOOX United Kingdom - 11075571MH , Giampaolo Viozzi Boots - Women Giampaolo Viozzi Boots online on YOOX United Kingdom - 11550085OI , Donna Soft Sandals - Women Donna Soft Sandals online on YOOX United Kingdom - 11392412XCGianvito Rossi Court - Women Gianvito Rossi Courts online on YOOX United Kingdom - 11246055LOLe Silla Sneakers - Women Le Silla Sneakers online on YOOX United Kingdom - 11523423TNManuela Dardozzi Sneakers - Men Manuela Dardozzi Sneakers online on YOOX United Kingdom - 11423735TIMFXhk415 Alegria TRAQ by Alegria QwikM6P2hQCo RAS 8762-ras SHOES FOR WOMEN , vZlGRPC1 WOMEN Vince Sneakers New designClearance price ASICS Court FFTrask Brady The Brady is a handsome match with your best jeans.woman Alexander McQueen Sneaker Sneakers Strong heat and wear resistanceMISS Pedro Garcia Black Maggie Sandals special offer ,
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.