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.Islo Isabella Lorusso Boots - Women Islo Isabella Lorusso Boots online on YOOX United Kingdom - 11471357GB , Ebarrito Ankle Boot - Women Ebarrito Ankle Boots online on YOOX United Kingdom - 11457336SEPuma Gold Luxe Sky Wedge SneakersVans ERA (retro / sport) / Port / RoyalPas De Rouge Ankle Boot - Women Pas De Rouge Ankle Boots online on YOOX United Kingdom - 11512823FUladies Manolo Blahnik Red/Beige . Sandals a good reputation in the worldFENTY PUMA by Rihanna Creeper Wrinkled Patent SneakersSKECHERS Ske 12830wht LOW-TOP TRAINERS FOR WOMENwomen Manolo Blahnik Nude Sandals Quality firstman/woman Lucky Brand Andies Sandals Good market , Adidas Zign Ballet pumps - yellowCalvin Klein JAELEE - TrainersLow cuf lea high top trainers , pale pink, Palladium , U mirvin b leather loafers , navy blue, Geox , man/woman Schutz Mules Colour: new sunshine wholesale , mens/womens Avec Les Filles Mallory Heels Breathable shoesTod's Loafers - Women Tod's Loafers online on YOOX United Kingdom - 11412664IPDoucal's Sandals - Men Doucal's Sandals online on YOOX United Kingdom - 11178858HPRick Owens Sneakers - Men Rick Owens Sneakers online on YOOX United Kingdom - 11452522XL , Dondup Sneakers - Women Dondup Sneakers online on YOOX United Kingdom - 44715248HN , Pantanetti Sandals - Women Pantanetti Sandals online on YOOX United Kingdom - 44837908JBSergio Rossi Sandals - Women Sergio Rossi Sandals online on YOOX United Kingdom - 11305644NAElisa Mey® Sandals - Women Elisa Mey® Sandals online on YOOX United Kingdom - 11327774KBVersace Jeans Sneakers - Women Versace Jeans Sneakers online on YOOX United Kingdom - 11433423NHGiorgio Fabiani Sandals - Women Giorgio Fabiani Sandals online on YOOX United Kingdom - 11568313DHIsabel Marant Bobby Sneaker Wedges Sneakers , MISS Steve Madden Black Wearme Wedges We have received praise from our customers.LADY Fila Black/Yellow/Multi New Sneakers Every article described is availableLADY Fendi Black and Brown Platforms Carefully selected materials , Stuart Weitzman Black Patent Thick Fringed Sandals ,
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.