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.Katy Perry Peach and Orange 4(66 SandalsWOMENS Burberry Brown Leather Wedges product qualitymen/women Frye Addie Mid Boots Louis, elaborate , men's/women's Tundra Boots Dot Boots Comfortable feeling , men/women Burton Ruler '18 Boots Comfortable feelingMen/Women Hispanitas Holli Boots Fine art , men/women The Kooples Espadrilles Colour: black discount price , Men/Women Adidas Prophere Shoes Schuhe Exquisite (middle) workmanship , Marni Sneakers - Men Marni Sneakers online on YOOX United Kingdom - 11230771OE , Adidas adidas Originals FOREST GROVE - Trainers - grey three/collegiate navy/grey towD.A.T.E. Sneakers - Women D.A.T.E. Sneakers online on YOOX United Kingdom - 11533995IO , Nike Sneakers - Women Nike Sneakers online on YOOX United Kingdom - 11506123JL , Cafènoir Court - Women Cafènoir Courts online on YOOX United Kingdom - 11558849MQ , Smeet Sneakers - Women Smeet Sneakers online on YOOX United Kingdom - 11531841DP , Zinda Boots - Women Zinda Boots online on YOOX United Kingdom - 11549749CB , Celine Boots - Women Celine Boots online on YOOX United Kingdom - 11505136NV , Roccobarocco Flip Flops - Women Roccobarocco Flip Flops online on YOOX United Kingdom - 11464207SWAlain Tondowski Court - Women Alain Tondowski Courts online on YOOX United Kingdom - 11531694HPCatarina Martins Boots - Women Catarina Martins Boots online on YOOX United Kingdom - 11039543TF , Steve Madden Sneakers - Women Steve Madden Sneakers online on YOOX United Kingdom - 11337293KLVoile Blanche Sneakers - Women Voile Blanche Sneakers online on YOOX United Kingdom - 11580898AU , Pollini Flip Flops - Women Pollini Flip Flops online on YOOX United Kingdom - 11569646TQ , Geox Ankle Boot - Women Geox Ankle Boots online on YOOX United Kingdom - 11499029LHJean-Michel Cazabat Sandals - Women Jean-Michel Cazabat Sandals online on YOOX United Kingdom - 11363607CN , Rene' Caovilla Boots - Women Rene' Caovilla Boots online on YOOX United Kingdom - 11494432LB , King of quantity Joie Baeli StudElegant and sturdy packaging Clarks Reedly Juno , J/Slides Sage Put wisdom into your style with the J/SLIDES Sage sneakerlady Jeffrey Campbell Pink Streetcred Platforms New varieties are introducedwomens Dolce&Gabbana Rainbow Sequin Slide Sandals Characteristic ,
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.