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.Fratelli Karida Ankle Boot - Women Fratelli Karida Ankle Boots online on YOOX United Kingdom - 11536438KJJeffrey Campbell Ankle Boot - Women Jeffrey Campbell Ankle Boots online on YOOX United Kingdom - 11252518IW , Isabel Marant Étoile Espadrilles - Women Isabel Marant Étoile Espadrilles online on YOOX United Kingdom - 11369490OL , Gusto Ankle Boot - Women Gusto Ankle Boots online on YOOX United Kingdom - 11520354FP , Guess By Marciano Black Leather SandalsWOMENS REPORT Silver Sandals clearance sale , Adidas Originals Zx 8000 Boost - Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 44919330EIwomen Prada Gray Camoscio Wedge Platforms Pleasant feeling , SUPERGA 2750 Cebra LOW-TOP TRAINERS FOR WOMEN , Redskins GRENATI - Trainers - cognacKeds CHAMPION CORE - Trainers Colour: white/navyRight Bank Shoe Co? Chita Boot , Melvin & Hamilton HOME - Slippers - grigio , mens/womens Even&Odd Classic heels Perfect processing , man/woman Rieker 41757 Mariah 57 Heels Wholesale trade , Dsquared2 Sneakers - Women Dsquared2 Sneakers online on YOOX United Kingdom - 11560649QR , D.A.T.E. Sneakers - Men D.A.T.E. Sneakers online on YOOX United Kingdom - 11415025WC , Hogan Boots - Men Hogan Boots online on YOOX United Kingdom - 11238043DBGeox Sneakers - Women Geox Sneakers online on YOOX United Kingdom - 11427357SRConverse Cons Sneakers - Women Converse Cons Sneakers online on YOOX United Kingdom - 11509182GH , Tod's Ankle Boot - Women Tod's Ankle Boots online on YOOX United Kingdom - 11543966CPMira Mikati Sneakers - Women Mira Mikati Sneakers online on YOOX United Kingdom - 11380231OHErnesto Dolani Loafers - Women Ernesto Dolani Loafers online on YOOX United Kingdom - 11545495PWSigerson Morrison Sandals - Women Sigerson Morrison Sandals online on YOOX United Kingdom - 11565033EFVersace Red Medusa Cardinal Slide SandalszBuPcqOs Under Armour Fat Tire SL , comfortability New Balance Numeric NM868 , special function Calvin Klein FinchWOMENS Brighton Brown Ofelia Sandals Suitable for colorZara Red Flat Leather with Buckles 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.