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.Armani Jeans Ankle Boot - Women Armani Jeans Ankle Boots online on YOOX United Kingdom - 11547388SN , Lisa Corti Ballet Flats - Women Lisa Corti Ballet Flats online on YOOX United Kingdom - 11531982NQ , Avec Modération Open-Toe Mules - Women Avec Modération Open-Toe Mules online on YOOX United Kingdom - 11235264WWSerafini Ankle Boot - Women Serafini Ankle Boots online on YOOX United Kingdom - 11080491CL , Steve Madden Black By Hilda Slip On Fashion Sneakers SneakersGiuseppe Zanotti Multi Color Sneakers Women SneakersCole Haan Purple Arden Platform Aster SandalsMen/Women Easy Spirit Kallye Loafers selling priceAdidas Clarks DOVE MADELINE - Ankle boots - navy , Men/Women Jewel Badgley Mischka Upton Heels high quality product , men/women Clarks Channing Essa Loafers Suitable for colormen/women To Boot New York March Boots luxuriousWexford Boots - Men Wexford Boots online on YOOX United Kingdom - 11491083WEEtnies Sneakers - Men Etnies Sneakers online on YOOX United Kingdom - 44921637VM , Barracuda Sneakers - Men Barracuda Sneakers online on YOOX United Kingdom - 11443058RR , Adidas Clarks DALIA SIERRA - High heeled boots - black2Star Sneakers - Women 2Star Sneakers online on YOOX United Kingdom - 11196693LS , Bikkembergs Boots - Women Bikkembergs Boots online on YOOX United Kingdom - 11520169XN , Ash Sneakers - Women Ash Sneakers online on YOOX United Kingdom - 11477613NH , Strategia Ankle Boot - Women Strategia Ankle Boots online on YOOX United Kingdom - 11515858WVBruno Premi Boots - Women Bruno Premi Boots online on YOOX United Kingdom - 11512220WOLanvin Ballet Flats - Women Lanvin Ballet Flats online on YOOX United Kingdom - 11492745BR , Jeffrey Campbell Court - Women Jeffrey Campbell Courts online on YOOX United Kingdom - 11467118BT , womens Vans Silver Women's Sneakers wear-resistantgood quality Frye Harness 8R W , womens Sergio Rossi Brown Wedges a wide range of productsMISS Giuseppe Zanotti Violet Yellow Wedges Exquisite workmanship , ladies Christian Louboutin Multicolor Sneakers Sneakers Excellent valueLADY Tom Ford Black 7094851312 Wedges On-linewomens Valentino Nero Rockstud Pumps Order welcome ,
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.