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.Donna Più Flip Flops - Women Donna Più Flip Flops online on YOOX United Kingdom - 11464802GL , WOMENS Gold Mckenna Sandals Hot sale , Emanuélle Vee Ankle Boot - Women Emanuélle Vee Ankle Boots online on YOOX United Kingdom - 11453973LGGiorgio Fabiani Ankle Boot - Women Giorgio Fabiani Ankle Boots online on YOOX United Kingdom - 11468746GE , women Elie Tahari Brown Huarache Sandals From the latest model , Easy Spirit Black Leather M (Usa) Good Condition Sandals , MISS Saint Laurent Silver Sandals Cheaper than the priceladies Burgundy Sandals Win the praise of customersLINCE 75330 Arena WEDGE-HEEL SANDALS FOR WOMEN , Stuart Weitzman Black Cognac Kiltie Golf Sneakersman/woman Loeffler Randall Gigi Boots Famous store , Esteve leather sneakers , leopard print, PataugasLeather block-heel sandals , white/silver-coloured, Anne Weyburn , The North Face Shellista II Shorty , Men/Women Emporio Armani T-bar sandals Reliable reputationDsquared2 Sneakers - Men Dsquared2 Sneakers online on YOOX United Kingdom - 11215567HW , Lanvin Sneakers - Men Lanvin Sneakers online on YOOX United Kingdom - 11407249QR , men's/women's J. Renee Cameo Heels Win the praise of customersEmporio Armani Loafers - Men Emporio Armani Loafers online on YOOX United Kingdom - 11530576MMBams Loafers - Women Bams Loafers online on YOOX United Kingdom - 11406998XTDsquared2 Sandals - Women Dsquared2 Sandals online on YOOX United Kingdom - 11055428NRVic Ankle Boot - Women Vic Ankle Boots online on YOOX United Kingdom - 11501619QD , nBQeDxTP WOMENS Clarks Current Wedges tender , IMt6zOi1 WOMENS Amalfi Sandals Elegant style , Naot Mikael The Mikael is from the Naot Scandinavian Collection, which runs as a Medium width.Unisa Fuschia Leather Kitten Heels with Bling Mules W/ SandalsWomen's Vitello Vernice Soft Platforms High quality and low effortwomens Vince Camuto Black Tulina Sandals Different styles and stylesGiuseppe Zanotti Dark Brown Beige Grey SneakersLadies Asics Multi Colored Sneakers Comfortable touch ,
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.