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.L' Autre Chose Sandals - Women L' Autre Chose Sandals online on YOOX United Kingdom - 11188868RU , Dolce & Gabbana Sandals - Women Dolce & Gabbana Sandals online on YOOX United Kingdom - 11344978IM , Paolo Da Ponte Loafers - Men Paolo Da Ponte Loafers online on YOOX United Kingdom - 11559033XGCharlotte Olympia Leopard Ponyskin High Top Sneakers. SneakersWomen's Sigerson Morrison Pink Sandals a great varietyCLARKS Autumn Peace SANDALIA PLANA DE MUJER , woman Burberry Black Brit Wedges settlement Priceladies Balenciaga Black Glove Sandals Online sales , man/woman Vaneli Dawne Heels high quality productCarson 2 metallic trainers , black/gold-coloured, Pumamens/womens Cole Haan Jagger Weave Oxford Oxfords real , Barrett Boots - Men Barrett Boots online on YOOX United Kingdom - 44845098SJ , Ash Sneakers - Men Ash Sneakers online on YOOX United Kingdom - 11571059WM , Geox Espadrilles - Men Geox Espadrilles online on YOOX United Kingdom - 11217766ERDoucal's Boots - Men Doucal's Boots online on YOOX United Kingdom - 11462359IIAdidas Shoe The Bear SANDY - High heeled sandals - light greyTriver Flight Boots - Men Triver Flight Boots online on YOOX United Kingdom - 11557025DOmen/women New Balance Classics WL696 Sneakers & Athletic New Balance Classics Outstanding featuresSoher Espadrilles - Women Soher Espadrilles online on YOOX United Kingdom - 11460611UD , Hogan Rebel Sneakers - Women Hogan Rebel Sneakers online on YOOX United Kingdom - 11564557JW , Giordana F. Sandals - Women Giordana F. Sandals online on YOOX United Kingdom - 11458409JCTribe Shoes Sneakers - Men Tribe Shoes Sneakers online on YOOX United Kingdom - 11340875NU , 6H2RR9tY PAPANATAS 4423 BOOTS FOR GIRLSdyd4kqX7 lady Black Sneakers Modern technology , 2gJ2NhEx MISS Yellow Sandals Order welcome , Elegant and solemn Tabitha Simmons Connie , Liu •Jo Shoes Court - Women Liu •Jo Shoes Courts online on YOOX United Kingdom - 11052542NWwomens Red and Blue Wedges Won highly esteemed and widely trusted at home and abroadLadies Nike Father's Day Sneakers New products in 2329 , swedish hasbeens Black Women's Lacy Platform Sandals ,
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.