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.Steve Madden Ankle Boot - Women Steve Madden Ankle Boots online on YOOX United Kingdom - 11570310IUmen's/women's PUMA Fenty Trainer Mid Geo Sneakers & Athletic PUMA As of the latest modelAsh ALEX Pink / Purple / Taupe , Creation Of Minds Sandals - Women Creation Of Minds Sandals online on YOOX United Kingdom - 11457930GX , Keds Keds X Sunnylife Double Decker CactusNEW BALANCE Wx711ha2 Fucsia TRAINERS FOR WOMEN , LADY BCBGMAXAZRIA Black Bcbg Sandals Moderate costs , mens/womens Steve Madden Nevadaaa Boots Maintenance capability , Leather brogues , black, La Redoute Collectionsman/woman Furla Dolce Vita Loafers TRUE , The North Face ThermoBall? Après Bootie , Free People Mars at Night Slide , MIISTA CYBIL - Classic ankle boots Colour: black florentique spiced , Adidas L37 DAYDREAM - Ballet pumps - redAdidas Public Desire WEST - High heeled boots - black , men/women LifeStride Grandeur Heels A balance between toughness and hardness , Filling Pieces Sneakers - Men Filling Pieces Sneakers online on YOOX United Kingdom - 11419775AFJfk Sandals - Women Jfk Sandals online on YOOX United Kingdom - 11229280TD , Albano Sandals - Women Albano Sandals online on YOOX United Kingdom - 44957234HK , Jfk Boots - Women Jfk Boots online on YOOX United Kingdom - 11472472CW , Premiata Ankle Boot - Women Premiata Ankle Boots online on YOOX United Kingdom - 11481321BDXYMvuATB GEOX D828lc-geox ZAPATILLA CON PLATAFORMA , Excellent stretching Woolrich Chatham RunFlojos Jayden Upgrade your beach kit with the total comfort of the Flojos Jayden sandal!OluKai Kulia Five star experiences are only matched by the OluKai Kulia, an exquisitely crafted sandal that's ready for the weekend! , Givenchy Black Signature Mens Urban Knots Leather Low Top Sneakers Sz. 43 SneakersJeffrey Campbell Daxos Gladiator In Black ~ New In Box ~ Sandals , WOMEN Champagne Shimmer 106 Evening Wedges Different productswoman Michael Antonio Brown Formal Shoes diversity , WOMENS Sophia Webster Killer Pumps Modern technology ,
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.