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.Liu ?Jo Shoes Court - Women Liu ?Jo Shoes Courts online on YOOX United Kingdom - 11549577CL , Ash Ankle Boot - Women Ash Ankle Boots online on YOOX United Kingdom - 11503261JMTory Burch Cracked Metallic Natalia Sandals , 27gY8C0p Walko trainers , chestnut, Redskins , Beautiful and charming Sliders , silver-coloured, CrocsMalibu Sandals™ Sandals - Men Malibu Sandals™ Sandals online on YOOX United Kingdom - 11563817MTVia Roma 15 Ankle Boot - Women Via Roma 15 Ankle Boots online on YOOX United Kingdom - 11534748UX , ladies LifeStride White 243l62 Sandals Ideal gift for all occasions , Tibi Nude / Natural Beige Robyn Seta Calf Sandals , LADY Topshop Pink Wedges Elegant and stable packaging , lady Black Wedged Sneaker Sneakers Superior quality , Blundstone CLASSIC - Classic ankle boots Colour: brownman/woman Nine West Counter Boots German Outletsmens/womens Natural Soul Alexis Loafers Excellent qualityU symbol a trainers , navy blue, Geox , Adidas Madden Girl REV - High heeled ankle boots - rose , Jack Wolfskin THUNDER BAY TEXAPORE - Winter boots - phantomSun 68 Sneakers - Men Sun 68 Sneakers online on YOOX United Kingdom - 11481301XLHouse of Hounds | House Of Hounds Bardin slip on tassel loafers in black , Ebarrito Loafers - Women Ebarrito Loafers online on YOOX United Kingdom - 11519452CX , Ruco Line Sneakers - Women Ruco Line Sneakers online on YOOX United Kingdom - 11495886KK , Leather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11309569LA , Nicholas Kirkwood Loafers - Women Nicholas Kirkwood Loafers online on YOOX United Kingdom - 11340917CG , ge0S2oZf Sanita Smart Step Professional PerennialTKEES Shadows The luminous TKEES Shadows sandals will cast their spell on you , Paul Green Black Suede Nubuck Cayanne Leather Peep Toe Bootie (B) Sandals , women Prada Silver Calzature Donna Sandals Good design , Nike Free Advantage Trainer Sneakers New Sneakerswoman Beverly Feldman Black Formal Shoes On-linewoman Tory Burch Black Heel Sandals 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.