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.Sam Edelman Flip Flops - Women Sam Edelman Flip Flops online on YOOX United Kingdom - 11559969CRSigerson Morrison Ankle Boot - Women Sigerson Morrison Ankle Boots online on YOOX United Kingdom - 11564924QG , Cuoieria Ankle Boot - Women Cuoieria Ankle Boots online on YOOX United Kingdom - 11484529RH , Pelledoca Ankle Boot - Women Pelledoca Ankle Boots online on YOOX United Kingdom - 11515895OK , SKECHERS Performance Glide 2.0 Ultra 55461Dr. Martens Work Rush Electrical Hazard Waterproof Composite Toe Rigger BootWOMENS Aquazzura Nude Alexa Suede Wedges High quality and low effort , Dr. Martens Work Burnham ST 6 Tie Boot , women Lucky Brand Tan Bootie Wedges Comfortlady Tan Abound Simone Espadrille Wedges impeccable , womens Converse Black Snake Sneakers Durable service , men/women Melissa Shoes Ultragirl Bow Flats delicatemen's/women's Vivienne Westwood Faun Boot Boots delicateBoxfresh TRIAKETT - High-top trainers Colour: khaki , Pantofola d`Oro MATERA - Trainersmen's/women's Klogs Footwear Sydney Clogs & Mules Pleasant appearance , Men/Women Bruno Magli Emilio Loafers Very good color , Valleverde Boots - Men Valleverde Boots online on YOOX United Kingdom - 11552024NH , Hogan Sneakers - Men Hogan Sneakers online on YOOX United Kingdom - 11541732JVNero Giardini Boots - Men Nero Giardini Boots online on YOOX United Kingdom - 11499981VW , Ermenegildo Zegna Loafers - Men Ermenegildo Zegna Loafers online on YOOX United Kingdom - 11555107LQ , 1,618 Ankle Boot - Women 1,618 Ankle Boots online on YOOX United Kingdom - 11499059KR , Keys Ankle Boot - Women Keys Ankle Boots online on YOOX United Kingdom - 11551396DW , Ruco Line Sneakers - Women Ruco Line Sneakers online on YOOX United Kingdom - 11219545KW , El Campero Boots - Women El Campero Boots online on YOOX United Kingdom - 11544541GV , JEb8nEMm MBT Pata TRAINERS FOR WOMENthe most convenient bernie mev. Rigged CharmModerate cost Spring Step IllianTory Burch Navy Blue Neoprene Slip On Sneaker Flat Loafer New Sneakers , Stuart Weitzman Pale Gold (Cava) Under It 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.