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.Fabio Rusconi Open-Toe Mules - Women Fabio Rusconi Open-Toe Mules online on YOOX United Kingdom - 11532163JBL' Autre Chose Espadrilles - Women L' Autre Chose Espadrilles online on YOOX United Kingdom - 11221487OW , Pas De Rouge Loafers - Women Pas De Rouge Loafers online on YOOX United Kingdom - 11497205FP , Liu ?Jo Shoes Sneakers - Women Liu ?Jo Shoes Sneakers online on YOOX United Kingdom - 11314916SM , Soludos Frenchie Embroidered Platform Smoking SlipperKenneth Cole New York Dance Chukka181 By Alberto Gozzi Ankle Boot - Women 181 By Alberto Gozzi Ankle Boots online on YOOX United Kingdom - 11252649VUAdidas Originals Gazelle S&T - Sneakers - Women Adidas Originals Sneakers online on YOOX United Kingdom - 11570231BW , WOMEN Topshop Mauve Beaded Sneaker Sneakers We have received praise from our customers.CALIFERS Abotinados Mujer Piel Denise Ja5004p68-negro SHOES FOR WOMENPrada Black 122917 Leather Mules/Slides Kitten Heels Sandals , Ladies Arturo Chiang Black Platforms a great varietyMen/Women Steve Madden Henly Sandals Moderate costmen/women Arche Naokou Heels Quality productsmens/womens Dr. Martens Eason 6-Eye Chukka Boots Crazy price , mens/womens Jonak DISCUT - Sandals durabilitymen/women Tecnica Moon Boot? Low Dance Boots Promotion , men/women Ted Baker Sealls 3 Boots low cost , Vans Sneakers - Men Vans Sneakers online on YOOX United Kingdom - 11474073XSmen/women Keds Driftkick Heathered Mesh Sneakers & Athletic Keds Breathable shoesDorothy Perkins Wide Fit WIDE FIT DIANA - Classic heelsCrime London Sneakers - Men Crime London Sneakers online on YOOX United Kingdom - 11400445XIMen/Women Hush Puppies TS Field Sprint Sneakers & Athletic Hush Puppies Clearance saleDsquared2 Sneakers - Women Dsquared2 Sneakers online on YOOX United Kingdom - 11409755DLAlexander Wang Court - Women Alexander Wang Courts online on YOOX United Kingdom - 11302258OHjvkpgmAj Sanuk Yoga Mat Wander Spectrum , Louis, elaborate Clarks Gracelin MaraMinnetonka Casey Enjoy the traditional moccasin both indoors and out with the Casey Slipper from Minnetonkawomen Jimmy Choo Nude 123456 Sandals Special promotions at the end of the yearWomen's Zara Black Mesh Sandals Guarantee quality and quantity ,
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.