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.Dolce & Gabbana Loafers - Men Dolce & Gabbana Loafers online on YOOX United Kingdom - 11470982XAPaola D'arcano Court - Women Paola D'arcano Courts online on YOOX United Kingdom - 11485332TXChelsea Crew Black Florence - Sandals , Manì Per Donna Più Court - Women Manì Per Donna Più Courts online on YOOX United Kingdom - 11464167TG , Chie By Chie Mihara Court - Women Chie By Chie Mihara Courts online on YOOX United Kingdom - 11549453QWAsics Tiger Gel-Lyte V G-Tx - Sneakers - Men Asics Tiger Sneakers online on YOOX United Kingdom - 11148680NN , women Merona Blue Wedges We have received praise from our customers. , women Maison Margiela Blue Gray Sneakers The newest styleMARIA MARE 61293 ZAPATO DE FIESTA PARA MUJERwomen Jimmy Choo Black Minny Sandals Immediate deliveryman/woman CHLOE GOSSELIN Azalea Boots Strong value , man/woman Matisse Peony Boots New in stock , Men/Women L.K. Bennett Flossie Heels Most practicalMen/Women DSQUARED2 Studded Sandal Sandals Great varietyBj?rn Borg R106 - Trainers Colour: black , man/woman Adrianna Papell Hastings Heels Online , Candice Cooper ROCK - Trainers Colour: crost bianco/base bianco , mens/womens Keen Mora Button Clogs & Mules Valuable boutiqueDoucal's Boots - Men Doucal's Boots online on YOOX United Kingdom - 11538709ML , man/woman Seychelles Well Rested Sandals Known for its excellent qualityPompili Court - Women Pompili Courts online on YOOX United Kingdom - 11522280CT , D.A.T.E. Sneakers - Women D.A.T.E. Sneakers online on YOOX United Kingdom - 11186923KPBibi Lou Sandals - Women Bibi Lou Sandals online on YOOX United Kingdom - 11347110NMMoschino Ballet Flats - Women Moschino Ballet Flats online on YOOX United Kingdom - 11326631HF , yTNfDuS5 Keds Champion Metallic Hygge Print , best seller Vince Camuto HartellOrder welcome Salomon X-Mission 3 , Mezlan Alcala Refresh your 9-to-5 look with the Mezlan® Alcala oxford , Valentino White Garavani Two-tone Metallic Leather Sneakers Sneakers , Fendi Multicolor Flowerland Crisscross Sport Slide Pink/Multi 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.