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.Docksteps Ankle Boot - Women Docksteps Ankle Boots online on YOOX United Kingdom - 11219238RTAtos Lombardini Court - Women Atos Lombardini Courts online on YOOX United Kingdom - 11533834UU , Piranha Ankle Boot - Women Piranha Ankle Boots online on YOOX United Kingdom - 11506351KLSTROVER 49043 FASHION SANDALS FOR WOMENJimmy Choo Nude Two-piece Slingback Sandals , mens/womens Casadei Cowboy/Biker boots Colour: tabacco Speed refund , UP2rkpLU men's/women's Report Warrick Heels service , Diadora Heritage By The Editor Sneakers - Women Diadora Heritage By The Editor Sneakers online on YOOX United Kingdom - 11498178PSVia Vela 14 Open-Toe Mules - Women Via Vela 14 Open-Toe Mules online on YOOX United Kingdom - 11542685JCJanet & Janet Ankle Boot - Women Janet & Janet Ankle Boots online on YOOX United Kingdom - 11529281OC , Golden Goose Deluxe Brand Sneakers - Women Golden Goose Deluxe Brand Sneakers online on YOOX United Kingdom - 11382356LP , Diadora Heritage B.Elite S L - Sneakers - Men Diadora Heritage Sneakers online on YOOX United Kingdom - 11449996MO , CALIFERS Mocasines Mujer Piel Lavie Colletion Ja614h77-negro FASHION LOAFERS FOR WOMEN , ladies Charlotte Olympia Red Monroe Sandals Many varietiesmens/womens H?gl Trainers Elegant shape , Men/Women French Sole Zahara Flats feature , Men/Women VIONIC Kirra Sandals Excellent quality , SKECHERS Performance Go Trail 2 Grip , Adidas Onitsuka Tiger GSM - Trainers - dark sepia , Men/Women Born Emmy Band Heels Economical and practicalConverse ONE STAR - Trainers - whiteHogan Sneakers - Women Hogan Sneakers online on YOOX United Kingdom - 44880375KF , Men/Women Steve Madden Frankel Sneakers & Athletic Steve Madden Long-term reputation , Melissa Boots - Women Melissa Boots online on YOOX United Kingdom - 11071973IJ , Divine Follie Sneakers - Women Divine Follie Sneakers online on YOOX United Kingdom - 11511998NXAnya Hindmarch Sneakers - Women Anya Hindmarch Sneakers online on YOOX United Kingdom - 11463677RJ , Bright colors Joules Evedon Tall BootComfortable feeling Soludos Venetian BootieIsabel Marant Beige Bayley Wila Blue Ivory Wedge High Top Sneakers Sneakers , WOMEN Zara Black Mesh (1544) Sandals Unique ,
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.