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.Andrea Morando Flip Flops - Women Andrea Morando Flip Flops online on YOOX United Kingdom - 11359534LH , Liu ?Jo Shoes Court - Women Liu ?Jo Shoes Courts online on YOOX United Kingdom - 11315314WBBase London Boots - Men Base London Boots online on YOOX United Kingdom - 11506917GQ , Puma X Icny Sneakers - Men Puma X Icny Sneakers online on YOOX United Kingdom - 11015030GIElisabetta Franchi Court - Women Elisabetta Franchi Courts online on YOOX United Kingdom - 11244170AM , Parlanti Ankle Boot - Women Parlanti Ankle Boots online on YOOX United Kingdom - 11504220EO , ladies Madewell Cognac Wylie Wedge Platforms Win highly appreciated , New Balance Pressure Relief Insole w/ Metatarsal Pad , SERGIO SERRANO 5812 ZAPATOS DE VESTIR PARA HOMBREmen's/women's Melissa Shoes Doll Fem Flats auctionMen/Women Dr. Martens Allana Boots good quality , Antony Morato Trainers - cremamen/women Pajar CANADA Grip Zip Boots Elegant and solemnmen's/women's Chinese Laundry Paradiso Sandals Cheaper than the priceNew Balance MSX90 - Trainers - blackMsgm Loafers - Women Msgm Loafers online on YOOX United Kingdom - 11254769XSSantoni Sneakers - Men Santoni Sneakers online on YOOX United Kingdom - 11520741VC , Hogan Sneakers - Men Hogan Sneakers online on YOOX United Kingdom - 11438386UNPuma NRGY NEKO ENGINEER - Neutral running shoes - black/iron gateMen/Women Adidas Men's Barricade Club Shoes Schuhe High quality and economy , Rick Owens Sneakers - Men Rick Owens Sneakers online on YOOX United Kingdom - 11496441CUD.A.T.E. Sneakers - Women D.A.T.E. Sneakers online on YOOX United Kingdom - 11557878XM , Keys Court - Women Keys Courts online on YOOX United Kingdom - 11553070AV , Diva Ankle Boot - Women Diva Ankle Boots online on YOOX United Kingdom - 11521448UE , F.Lli Bruglia Loafers - Women F.Lli Bruglia Loafers online on YOOX United Kingdom - 11402830XE , UbtVQw0a WOMENS adidas Neverfull Sneakers CheapestHuman border Dr. Martens 1461 Orleans , A balance between toughness and hardness PUMA Breaker Hi , Puma Whisper White/Puma Black Women's Suede Platform Core / 363559-01 SneakersPrada Orange and Black Grosgrain Web Thong 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.