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.Marc Ellis Ankle Boot - Women Marc Ellis Ankle Boots online on YOOX United Kingdom - 11538911XK , Pretty Ballerinas Ballet Flats - Women Pretty Ballerinas Ballet Flats online on YOOX United Kingdom - 11548696WU , Sergio Rossi Flip Flops - Women Sergio Rossi Flip Flops online on YOOX United Kingdom - 11412735EPReebok Pump Supreme - Sneakers - Men Reebok Sneakers online on YOOX United Kingdom - 11379472CELADY Tory Burch Navy Kelsey Sandals Big clearance saleSTONEFLY Francy 4 ZAPATO DE CU?A PARA MUJER , Women's Jack Rogers Brown Lauren Sandals Affordable , SKECHERS Performance On-The-Go City 2 - Adapt , man/woman Nina Caela Heels low cost , men's/women's Vaneli Gaea Flats Optimal priceGw500bip trainers , burgundy, New BalanceAdidas Zign Slip-ons - blackRiver Island | River Island suede backless loafer in navyMen/Women Frye Gates High Sneakers & Athletic Frye Cheapmen/women LAB Heeled mules Colour: black comfortable , mens/womens Salomon Heika CS WP Boots New marketBikkembergs Sneakers - Women Bikkembergs Sneakers online on YOOX United Kingdom - 11332222RF , Lanvin Sneakers - Men Lanvin Sneakers online on YOOX United Kingdom - 11401807NK , ASOS DESIGN | ASOS DESIGN Loafers In Pink Suede With Natural SoleTommy Hilfiger Sneakers - Men Tommy Hilfiger Sneakers online on YOOX United Kingdom - 11437795NRLeather Crown Sneakers - Men Leather Crown Sneakers online on YOOX United Kingdom - 11463690PV , Superga® Sneakers - Women Superga® Sneakers online on YOOX United Kingdom - 11462703BA , Jeannot Sandals - Women Jeannot Sandals online on YOOX United Kingdom - 11498618QAPierre Balmain Sneakers - Men Pierre Balmain Sneakers online on YOOX United Kingdom - 11580222WD , Strong value Deer Stags Campfire , Quiksilver Haleiwa Cool out in the Haleiwa sandals from Quiksilver , Hogan Silver Metallic Progetto Soft Fint Allac + Fibbia Hxw116051202sh3018 Eur 40 Sneakers , Golden Goose Deluxe Brand Red Velvet V-start 2 Low Top Sneakers SneakersDior Pink Fusion White Grey Flower Embroidered Sneaker 41 SneakersOKA b. Black with Red and Aqua Beads 7-8 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.