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.Saucony Shadow Original W - Sneakers - Women Saucony Sneakers online on YOOX United Kingdom - 11446975RM , Blu Byblos Sandals - Women Blu Byblos Sandals online on YOOX United Kingdom - 11124030NKECCO Sport Biom Venture GTX TieCASTELLANISIMOS C2011201-rj WEDGE-HEEL SANDALS FOR WOMENWOMEN Sam Edelman Silver Sandals ComfortWOMEN Saddle Brown Wedge Sandals Excellent , Palomitas By Paloma Barceló Sandals - Women Palomitas By Paloma Barceló Sandals online on YOOX United Kingdom - 11518482JWOvye' By Cristina Lucchi Sandals - Women Ovye' By Cristina Lucchi Sandals online on YOOX United Kingdom - 11563737RVwomens Pink Rock Stud Jelly Sandals Attractive fashionCLARKS Tri Nyla SANDALIA PLANA DE MUJERAdidas Gabor WIDE FIT - Ankle boots - fjord , man/woman Sofft Velden Heels Known for its good qualityAdidas HUGO UPTOWN ASYA - Trainers - blackAdidas Gabor Ankle boots - light brownO.X.S. Sneakers - Men O.X.S. Sneakers online on YOOX United Kingdom - 11278290KRPollini Loafers - Men Pollini Loafers online on YOOX United Kingdom - 11447441EJMen/Women Keds Vollie LTT Sneakers & Athletic Keds Excellent functionRoyal Republiq Boots - Men Royal Republiq Boots online on YOOX United Kingdom - 11318638FKSkechers Sneakers - Women Skechers Sneakers online on YOOX United Kingdom - 11529062QFAquazzura Sneakers - Women Aquazzura Sneakers online on YOOX United Kingdom - 11552925HA , Adidas Originals Sneakers - Women Adidas Originals Sneakers online on YOOX United Kingdom - 11463533HD , Ruco Line Sneakers - Women Ruco Line Sneakers online on YOOX United Kingdom - 11506598BRPaloma Barceló Sandals - Women Paloma Barceló Sandals online on YOOX United Kingdom - 11383944BAPierre Hardy Sandals - Women Pierre Hardy Sandals online on YOOX United Kingdom - 11202527GW , low cost Bed Stu LouisWomen's Cole Haan Cooper Sandals a good reputation in the worldwomens Jimmy Choo Gold Heels Platforms Modern and stylish fashion , woman Alexander McQueen Black Platforms Elegant and stable packaging , womens Steve Madden Cream Platform Sandals tenderWOMENS Calleen Cordero Black Heels Pumps quality
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.