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.Triver Flight Ankle Boot - Women Triver Flight Ankle Boots online on YOOX United Kingdom - 11468907GNAndrea Pinto Ankle Boot - Women Andrea Pinto Ankle Boots online on YOOX United Kingdom - 11552995KFOfficine Creative Italia Loafers - Women Officine Creative Italia Loafers online on YOOX United Kingdom - 11562683FL , See By Chloé Sandals - Women See By Chloé Sandals online on YOOX United Kingdom - 44936657MENike Classic Cortez Leather - Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11210619VGCamilla Elphick Court - Women Camilla Elphick Courts online on YOOX United Kingdom - 11514894RRSTILMODA 3211 FASHION LOAFERS FOR WOMEN , Alma En Pena. Ankle Boot - Women Alma En Pena. Ankle Boots online on YOOX United Kingdom - 11525569TOTwin-Set Simona Barbieri Sneakers - Women Twin-Set Simona Barbieri Sneakers online on YOOX United Kingdom - 11492907DRwomen Brash Brown Wedges Make full use of materials , ALBERTO GUARDIANI 56371 Cwsx LOW-TOP TRAINERS FOR WOMENSTONEFLY Oprah 3 FASHION ANKLE BOOTS FOR WOMENladies Badgley Mischka Brown Formal Shoes Low price , Tory Burch Black Multi Flip Flops SandalsAdidas Bullboxer Cowboy/Biker boots - blackKennel & Schmenger Contrast Stitch Bootmen/women Cole Haan Marla Waterproof Boot Boots auctionDior Court - Women Dior Courts online on YOOX United Kingdom - 11460993IE , KARL LAGERFELD CELESTIA STRAP - Cowboy/Biker boots Colour: black with silver , Adidas Originals Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 11410688DTFilling Pieces Sneakers - Men Filling Pieces Sneakers online on YOOX United Kingdom - 11364341VFNina Ricci Court - Women Nina Ricci Courts online on YOOX United Kingdom - 11520843VLFauzian Jeunesse Court - Women Fauzian Jeunesse Courts online on YOOX United Kingdom - 11548559BXPrada Purple Satin Heels (38966) Sandalsfine Paul Green Nandi LFR , Very good classification Bacco Bucci Zarralady Prada Beige Leather Pointed Pumps Highly praised and appreciated by the audience of consumersSalomon White and Gray Women's Snowboard Boots 6/Eur 37 White/Grey Autofit2d Sneakerswomens Givenchy Black None Sandals A balance between toughness and hardness , WOMEN SCHUTZ Gold Sandals Elegant and robust packaging
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.