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.Elvio Zanon Ankle Boot - Women Elvio Zanon Ankle Boots online on YOOX United Kingdom - 11520284INPierre Darré Ankle Boot - Women Pierre Darré Ankle Boots online on YOOX United Kingdom - 11325613QCSNIPE 21801 FASHION LOAFERS FOR WOMENBalenciaga White Triple S Sneakers SneakersC07XHaG2 Roma leather trainers , black, PumaKat Maconie Felicity - Ankle Boot - Women Kat Maconie Ankle Boots online on YOOX United Kingdom - 11567176MQ , woman Valentino Nude Jelly Rockstud Sandals Different styles and styles , women Salvatore Ferragamo Multi-color 1356 Sandals Carefully selected materials , Via Spiga Platinum V-idris / 2076 Sandalsman/woman Athena Alexander Monett Heels Different goods , men's/women's Italian Shoemakers Lorel Heels Modern modeTod's Loafers - Women Tod's Loafers online on YOOX United Kingdom - 11543159SNPuma FUTURE 2.4 TT - Astro turf trainers - black/shocking orange , Men/Women Not Rated Rayza Sneakers & Athletic Not Rated discount , Leather Crown Sneakers - Men Leather Crown Sneakers online on YOOX United Kingdom - 11536652SIDiesel Court - Women Diesel Courts online on YOOX United Kingdom - 11534658JE , Gia Couture Slippers - Women Gia Couture Slippers online on YOOX United Kingdom - 11265623TF , 67 Sixtyseven Sneakers - Women 67 Sixtyseven Sneakers online on YOOX United Kingdom - 11514261CQBianca Di Court - Women Bianca Di Courts online on YOOX United Kingdom - 11351114GW , Giordana F. Sandals - Women Giordana F. Sandals online on YOOX United Kingdom - 11458413KGGiuseppe Zanotti Court - Women Giuseppe Zanotti Courts online on YOOX United Kingdom - 11395241SU , Alaïa Ankle Boot - Women Alaïa Ankle Boots online on YOOX United Kingdom - 11488902AP , FRLdjcUL Lacoste L.30 Sandal 218 2 , Easy life Lowa Phoenix Mesh Lo , low cost New Balance MC696v3 , Modern and stylish fashion Tommy Hilfiger GarsonWomen's Hermès Brown Paris Leather Sandals Different styles and stylesNike Brown Women's Dunk Sky Hi 2.0 Sneakerboot Sneakerslady J.Crew Flax Canvas Espadrille Wedges Online saleslady Prada Eggplant Slingback Pumps a great variety ,
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.