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.Nila & Nila Loafers - Women Nila & Nila Loafers online on YOOX United Kingdom - 11476784WM , Rag & Bone Sandals - Women Rag & Bone Sandals online on YOOX United Kingdom - 11567222CWDolce & Gabbana Loafers - Men Dolce & Gabbana Loafers online on YOOX United Kingdom - 11127945WVSKECHERS 38472 WEDGE-HEEL SANDALS FOR WOMENWOMENS BCBGMAXAZRIA Ivory/ Brown Sandals durableAnyi Lu Multi Color-beige/Taupe/Metallic Copper Slingback Strap Women's Athena Dress Sandals , LADY Jeffrey Campbell Black Foxy Platforms Excellent performanceLadies Burberry Magenta Espadrilles Sandals Wedges newcomer , MISS Fendi Brown 8x4084 Sandals Cheap ideal , mens/womens H?gl Platform boots Colour: schwarz Complete specificationChie Mihara ECAI - Platform sandals Colour: stella terraThompson Boots - Men Thompson Boots online on YOOX United Kingdom - 11550315DE , mens/womens adidas Crazytrain Pro Sneakers & Athletic adidas Complete specificationEtro Boots - Women Etro Boots online on YOOX United Kingdom - 11475136BAMontané Espadrilles - Women Montané Espadrilles online on YOOX United Kingdom - 11559370KJSchutz Sandals - Women Schutz Sandals online on YOOX United Kingdom - 11129299RSLumberjack Sneakers - Women Lumberjack Sneakers online on YOOX United Kingdom - 11577158MJSantoni Sandals - Women Santoni Sandals online on YOOX United Kingdom - 11388531KD , New Balance Sneakers - Women New Balance Sneakers online on YOOX United Kingdom - 11571686MRCasadei Ankle Boot - Women Casadei Ankle Boots online on YOOX United Kingdom - 11451310IKDonna Soft Sandals - Women Donna Soft Sandals online on YOOX United Kingdom - 11392412XCRuco Line Sneakers - Women Ruco Line Sneakers online on YOOX United Kingdom - 11334514DK , Dr. Scholl's Tan The Exercise SandalsWOMENS Valentino Poudre Rockstud Wedges Elegantm7sQTl9X Kenneth Cole Reaction Casino Chukka , Modern and elegant Rupert Sanderson Maeve FlatImmediate delivery Sanuk Nice Bootah LXGlobal sales Tahari Giada Sandal , VIONIC Farra You can count on always looking and feeling your best in the VIONIC Farra sandal , Mezlan Baena The Baena is the ultimate in sport-dress luxury fashion footwear!
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.