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.Tosca Blu Shoes Sandals - Women Tosca Blu Shoes Sandals online on YOOX United Kingdom - 11156752RBMiu Miu Ankle Boot - Women Miu Miu Ankle Boots online on YOOX United Kingdom - 11340933CLSaucony Jazz O - Sneakers - Men Saucony Sneakers online on YOOX United Kingdom - 11545210LUOTAZUA 77073 FASHION BOOTS FOR WOMEN , Adidas Originals Tubular Shadow - Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 11261807AOLadies Kendall + Kylie Black Wedges German OutletsWOMEN Keen Chocolate Brown/Woodbine Bryce Sneakers Modern designman/woman Kamik Haley Boots Orders are welcomemen's/women's LifeStride Baffle Loafers Win highly appreciatedCasta?er CAMPESINA - High heels Colour: beigeAdidas Puma VIKKY PLATFORM RIBBON - Trainers - whiteAdidas Calvin Klein Jeans DORA - Trainers - black , Sandals with cord straps , black/white, La Redoute Collections , Men/Women Crocs Lina Shiny Flat Flats Recommended today , Adidas mint&berry High heeled boots - cognacBikkembergs Sneakers - Men Bikkembergs Sneakers online on YOOX United Kingdom - 44998903DR , men/women Dr. Scholl's Wander Boot Sneakers & Athletic Dr. Scholl's Authentic guaranteeAdidas adidas Originals GAZELLE - Trainers - core black/white/gold metallicHenry Beguelin Boots - Men Henry Beguelin Boots online on YOOX United Kingdom - 11523412BJJoshua*S Sneakers - Women Joshua*S Sneakers online on YOOX United Kingdom - 11428886AITod's Loafers - Women Tod's Loafers online on YOOX United Kingdom - 11543081OP , Norma J.Baker Boots - Women Norma J.Baker Boots online on YOOX United Kingdom - 11477006CHAlberto Fermani Loafers - Women Alberto Fermani Loafers online on YOOX United Kingdom - 11563470BJYear-end special promotions ECCO Aquet Perf TieBorn Lake Breeze through the season with the go-with-anything Lake sandal from Brn , Trotters Accent Pair your carefree mood with the easy vibes of the Trotters Accent slip-on shoe.Christian Louboutin Black Pik Boat Spiked Leather Sneakers Sneakers , Vic Matié Black+grey + Orange Fable Neoprene Sneakerswomen Giuseppe Zanotti Milti-color Wedges High qualityLadies Kenzo Multicolor Floral Sneakers Sneakers superior ,
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.