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.Vic Matiē Ankle Boot - Women Vic Matiē Ankle Boots online on YOOX United Kingdom - 11454807UF , New Balance Blue 574 Summit SneakersWomen's Fendi Pom Pom Sandals Discount , Giō Di Grünland Ankle Boot - Women Giō Di Grünland Ankle Boots online on YOOX United Kingdom - 11485483ASSteve Madden Open-Toe Mules - Women Steve Madden Open-Toe Mules online on YOOX United Kingdom - 11355560LAmen/women Seychelles Catwalk Boots the most convenientmens/womens Merrell Terrant Strap Sandals usemen/women Molly Bracken T-bar sandals Outstanding style , Men/Women Refresh Ankle boots Colour: grey elegant , Santoni Sneakers - Men Santoni Sneakers online on YOOX United Kingdom - 11251714BImens/womens Steve Madden Beacon Slouch Boot Boots Tide shoes listman/woman Dr. Scholl's Madison Sneakers & Athletic Dr. Scholl's Known for its good quality , Rodo Court - Women Rodo Courts online on YOOX United Kingdom - 11462793OS , Valetti Court - Women Valetti Courts online on YOOX United Kingdom - 11474093IK , Fru.It Boots - Women Fru.It Boots online on YOOX United Kingdom - 11555749WA , Ixos Ankle Boot - Women Ixos Ankle Boots online on YOOX United Kingdom - 11544775BISalvatore Ferragamo Court - Women Salvatore Ferragamo Courts online on YOOX United Kingdom - 11488466KCKat Maconie Sandals - Women Kat Maconie Sandals online on YOOX United Kingdom - 11240051LSLe Silla Court - Women Le Silla Courts online on YOOX United Kingdom - 11174558NTHaider Ackermann Loafers - Women Haider Ackermann Loafers online on YOOX United Kingdom - 11330172FNPierre Darré Court - Women Pierre Darré Courts online on YOOX United Kingdom - 11316394XD , Le Silla Court - Women Le Silla Courts online on YOOX United Kingdom - 11287628NR , Cesare P. Sneakers - Men Cesare P. Sneakers online on YOOX United Kingdom - 11458287FPRebecca Minkoff White Hayden Fisherman Sandals , Women's Anthropologie Wandering Platforms Order welcomegood quality Lowa Lyxa GTX MidFine processing Wolverine 8" Blackhorn , Botkier Texas Bring a bold look into the mix with the Botkier Texas booties , women Badgley Mischka Gold Crystal Wedges Beautiful designwomen Valentino Coffee Rockstud Sandal Platforms Excellent
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.