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.Cesare Paciotti Flip Flops - Women Cesare Paciotti Flip Flops online on YOOX United Kingdom - 11452482ITMercante Di Fiori Sandals - Women Mercante Di Fiori Sandals online on YOOX United Kingdom - 11509058TJ , Samsøe Φ Samsøe Sneakers - Women Samsøe Φ Samsøe Sneakers online on YOOX United Kingdom - 11318724FJCross Walk Ankle Boot - Women Cross Walk Ankle Boots online on YOOX United Kingdom - 11156701TR , See By Chloé Sandals - Women See By Chloé Sandals online on YOOX United Kingdom - 11380312VQ , Officine Del Cuoio Loafers - Men Officine Del Cuoio Loafers online on YOOX United Kingdom - 11485280MVPlomo Ankle Boot - Women Plomo Ankle Boots online on YOOX United Kingdom - 11459410KV , women Escada Brown Pumps Order welcomeLadies Prada Black Bow Sandals Carefully selected materialsLADY Jack Rogers Blue Liliana Sandals Superior quality , ecco FARA - High-top trainers Colour: night skyman/woman Stacy Adams Napa Loafers Fine wildmen/women Rose Petals Brandi Heels comfortableMinelli Classic ankle boots Colour: noir , Adidas Peter Kaiser BINELLA - Classic heels - sandmen's/women's CL By Laundry Dara Heels Tide shoes listMarni Sneakers - Men Marni Sneakers online on YOOX United Kingdom - 11343371AP , Bikkembergs Sneakers - Men Bikkembergs Sneakers online on YOOX United Kingdom - 11326259VR , Dior Homme Sneakers - Men Dior Homme Sneakers online on YOOX United Kingdom - 11464630MH , Cafènoir Sneakers - Women Cafènoir Sneakers online on YOOX United Kingdom - 11406919XGJeannot Sandals - Women Jeannot Sandals online on YOOX United Kingdom - 11548538OT , Desigual Sneakers - Women Desigual Sneakers online on YOOX United Kingdom - 11574104FI , .Amen. Open-Toe Mules - Women .Amen. Open-Toe Mules online on YOOX United Kingdom - 11476053QR , Hogan Rebel Sneakers - Women Hogan Rebel Sneakers online on YOOX United Kingdom - 11540157RESergio Rossi Court - Women Sergio Rossi Courts online on YOOX United Kingdom - 11286500JEO Jour Sandals - Women O Jour Sandals online on YOOX United Kingdom - 11418831OPMunro Traveler Life is an adventure, so dress for the occasion with the Traveler slip-on from Munro American. , Nike Black/Green Free Tr 5 Prt 704695-013 Women's Training Sneakers SneakersWOMENS Gold Platine Formal Shoes Attractive and durable , Women's Manolo Blahnik Coral Jeweled Sandals Elegant appearance ,
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.