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.Le Dangerouge Ankle Boot - Women Le Dangerouge Ankle Boots online on YOOX United Kingdom - 11506337NC , Mm6 Maison Margiela Sandals - Women Mm6 Maison Margiela Sandals online on YOOX United Kingdom - 11564821TR , L' Autre Chose Loafers - Women L' Autre Chose Loafers online on YOOX United Kingdom - 11256557MUNike Sb Collection Sneakers - Men Nike Sb Collection Sneakers online on YOOX United Kingdom - 11378326AN , j2iqWuFC man/woman Rockport Charson Boots fashionableTed Baker BLY 9 black , VEXED Sandalia Vexed De Piel Negra 16174 FASHION SANDALS FOR WOMEN , WOMENS Tory Burch Black Gail Sandals Different styles and stylesCLARKS Evie Buzz FASHION BALLERINAS FOR WOMENwomens Prada Brown Sneakers Sneakers Special Pricemen/women Giorgio Brutini Revenant Oxfords Most practical , Shepherd EMANUEL - Classic ankle bootsman/woman Steve Madden Getdown Sandals discount , Men/Women Soft Style Gilnora Boots New varieties are launched , man/woman Nine West Jazz Heels Crazy price, Birmingham , man/woman Stuart Weitzman Scrunchboot Boots Orders are welcomeASOS DESIGN | ASOS DESIGN brogue shoes in tan leather with chunky sole , Mizuno WAVE TORNADO X2 - Volleyball shoes - ombre blue/safety yellow/hawaiian ocean , Blumarine Court - Women Blumarine Courts online on YOOX United Kingdom - 11315875EJ , Giorgio Armani Loafers - Women Giorgio Armani Loafers online on YOOX United Kingdom - 11579501BT , Patrizia Pepe Boots - Women Patrizia Pepe Boots online on YOOX United Kingdom - 11548299QXLaura Biagiotti Sandals - Women Laura Biagiotti Sandals online on YOOX United Kingdom - 11565457ST , Marco Barbabella Court - Women Marco Barbabella Courts online on YOOX United Kingdom - 11342237IGI.N.K. Shoes Loafers - Men I.N.K. Shoes Loafers online on YOOX United Kingdom - 11580237NTValuable boutique Corral Boots Q5010 , 2DPCyCnt woman zinc Red Platforms brand , Aquazzura Red Suede Wild Thing Suede/Fringed Stiletto Sandals , Enzo Angiolini Gold with Crystals Sexy Sandalswomen Stuart Weitzman Fourbucks Platforms Most practical , WOMENS Christian Louboutin Blue/Pink/Purple/Orange Duplice Pumps Negotiate ,
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.