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.Giordana F. Ankle Boot - Women Giordana F. Ankle Boots online on YOOX United Kingdom - 11546366QF , Del Gatto Sandals - Women Del Gatto Sandals online on YOOX United Kingdom - 11460575NM , Christopher Kane Sneakers - Women Christopher Kane Sneakers online on YOOX United Kingdom - 11456753VL , Lella Baldi Court - Women Lella Baldi Courts online on YOOX United Kingdom - 11492048IDStellaberg Ankle Boot - Women Stellaberg Ankle Boots online on YOOX United Kingdom - 11258806XN , Converse All Star Ct As Hi Sequins - Sneakers - Women Converse All Star Sneakers online on YOOX United Kingdom - 11336348LLNike Wmns Cortez Ultra Lotc Qs - Sneakers - Women Nike Sneakers online on YOOX United Kingdom - 11101191AMWomen's Calvin Klein Red Perforated Sandals High quality and cheap , Ladies Easy Street Linin Formal Shoes Order welcome , Women's Black Red & White Wedges Online salesCORINA C7037 Negro PLATFORM SHOES FOR WOMEN , ladies Bare Traps Mandy Sandals Most economicalmen/women GUESS Selexy Heels discount priceNew Balance Fresh Foam Hierro V2 , man/woman Adrianna Papell Pam Clogs & Mules Order welcomemens/womens Dolce Vita Elana Boots List of explosionsBaccaglini Loafers - Men Baccaglini Loafers online on YOOX United Kingdom - 11464997JP , River Island | River Island chunky flatform loafers with chain detail in blackMen/Women Nike VaporX 12 Club TF Sneakers & Athletic Nike Beautiful appearanceAdidas adidas Originals PROPHERE - Trainers - basic green/night carbon/solar red , Adidas Selected Femme SLFDONNA CONTRAST TRAINER - Trainers - glazed ginger , Versace Collection Sneakers - Men Versace Collection Sneakers online on YOOX United Kingdom - 11156726XB , Magrit Court - Women Magrit Courts online on YOOX United Kingdom - 11502524FH , Kanna Espadrilles - Women Kanna Espadrilles online on YOOX United Kingdom - 11354314LB , Sophia Webster Loafers - Women Sophia Webster Loafers online on YOOX United Kingdom - 11278329FT , Blu Byblos Sneakers - Women Blu Byblos Sneakers online on YOOX United Kingdom - 11494587BU , Stuart Weitzman Silver Penelope Quarter SandalsOutstanding features Florsheim Work Rambler Creekwomen Jimmy Choo White Strappy Sandals Sale online storeMISS Miu Miu Mary Jane Platforms Excellent performance
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.