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.Sgn Giancarlo Paoli Sandals - Women Sgn Giancarlo Paoli Sandals online on YOOX United Kingdom - 11293961BN , Brunello Cucinelli Ankle Boot - Women Brunello Cucinelli Ankle Boots online on YOOX United Kingdom - 11400319MX , Leather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11461006BD , WOMENS Sigerson Morrison Black Sandals Easy , Converse All Star Ct As Hi Sequins Distressed - Sneakers - Women Converse All Star Sneakers online on YOOX United Kingdom - 11336302SJNike Air Vapormax Plus - Sneakers - Women Nike Sneakers online on YOOX United Kingdom - 11556983WJ , Nike Sail and Metallic Gold Limited Edition Sky Hi Paris Dunks SneakersNEW TEEN 185770-b5300 Black-off White HIGH-TOP TRAINERS?FOR WOMEN , woman Jimmy Choo Veto 100 Sandals Exquisite workmanship , Converse Chuck 70 - Full Gator HiRockport Cobb Hill Collection Cobb Hill HannahGiuseppe Zanotti Burgundy Black Gold Unknown SneakersTiger of Sweden BRUKARE - Trainers Colour: khakiman/woman Not Rated Solene Sandals unique , men/women Cordani Bernie Boots Personalization trendGiorgio 1958 Smart slip-ons From , men's/women's Sofft Tansy Heels New varieties are launchedBoxfresh BERTHAR - High-top trainers - black , Carshoe Boots - Men Carshoe Boots online on YOOX United Kingdom - 11442406PR , man/woman Lucky Brand Feniya Sandals a wide variety of goodsCuoieria Loafers - Women Cuoieria Loafers online on YOOX United Kingdom - 11483557NV , Magrit Court - Women Magrit Courts online on YOOX United Kingdom - 11052682AI , Ebarrito Sneakers - Women Ebarrito Sneakers online on YOOX United Kingdom - 11519158KLChie Mihara Court - Women Chie Mihara Courts online on YOOX United Kingdom - 11482077EQ , Fendi Ankle Boot - Women Fendi Ankle Boots online on YOOX United Kingdom - 11240478IHipiUquJ5 women Topshop Sandals Rich designstable quality Altra Footwear One V3 , Oboz Campster The Oboz Campster sandal keeps you steady on your feet while on the trails or crossing your favorite creek.