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.Rd Company Ankle Boot - Women Rd Company Ankle Boots online on YOOX United Kingdom - 11339579MQAsh Ankle Boot - Women Ash Ankle Boots online on YOOX United Kingdom - 11460396BU , HUMAT Malena Mule-humat CLOGS FOR WOMEN , lady Prada Cream Sandals Quality first , Kendall + Kylie Ankle Boot - Women Kendall + Kylie Ankle Boots online on YOOX United Kingdom - 11324210IF , Twin-Set Simona Barbieri Ankle Boot - Women Twin-Set Simona Barbieri Ankle Boots online on YOOX United Kingdom - 11280569CROvye' By Cristina Lucchi Court - Women Ovye' By Cristina Lucchi Courts online on YOOX United Kingdom - 11456804CD , Moa Master Of Arts Sneakers - Men Moa Master Of Arts Sneakers online on YOOX United Kingdom - 11497926BXSgn Giancarlo Paoli Sandals - Women Sgn Giancarlo Paoli Sandals online on YOOX United Kingdom - 11162509HH , Tory Burch Black Miller 60mm Wedge Nappa Leather Sandals , Ariat Workhog 8" Wide Square Toe H2O , Tata Italia Heeled mules Colour: blackeS Skateboarding | eS Skateboarding Accel slim sneaker in blackAdidas adidas Originals NMD_R1 - Trainers - core blackmen/women L'Artiste by Spring Step Dova Heels reasonable price , Guidi Boots - Men Guidi Boots online on YOOX United Kingdom - 11464456ALAdidas Bianco NOOS - High heeled ankle boots - blackmen/women K-Swiss Hoke T CMF Sneakers & Athletic K-Swiss Online , Bruno Bordese Sandals - Men Bruno Bordese Sandals online on YOOX United Kingdom - 11428145UIVans Sneakers - Women Vans Sneakers online on YOOX United Kingdom - 11313209RIAdidas Sneakers - Women Adidas Sneakers online on YOOX United Kingdom - 11495247XN , Lanvin Ankle Boot - Women Lanvin Ankle Boots online on YOOX United Kingdom - 11230398WIWindsor Smith Court - Women Windsor Smith Courts online on YOOX United Kingdom - 11288492XJ , Miu Miu Sandals - Women Miu Miu Sandals online on YOOX United Kingdom - 11454512UJ , High quality and cheap Rip Curl Freedom , Excellent workmanship Ariat Terrain H2O , Excellent stretching Justin Amarillo Waterproof , Kamik Bali Explore exotic locales in total comfort with the Bali sandal from Kamik. , Jimmy Choo Beige Suede Dillan Criss Cross Block Heel Open Sandals , Tory Burch Green Gemini Eva Rope Wedges 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.