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.Divine Follie Court - Women Divine Follie Courts online on YOOX United Kingdom - 11504887MFAngela George Sneakers - Women Angela George Sneakers online on YOOX United Kingdom - 11533978BDPantanetti Ankle Boot - Women Pantanetti Ankle Boots online on YOOX United Kingdom - 11474237OX , Givenchy Multicolor Nike Riccardo Tisci Sneakers , Ladies Valentino Tan Suede Rockstud Sandals Sufficient supplyCRESSY 50300-cressy WEDGE ANKLE BOOTS FOR WOMEN , BRUNATE 38266 FASHION ANKLE BOOTS FOR WOMENmens/womens Pikolinos Avila W6H-8780 Boots cheap pricemen/women Camper Kara - K400208 Boots Impeccable , men/women ECCO Jeremy Tie Oxfords Various styles , Men/Women VOLATILE Sofia Boots Sales Italymen's/women's Joie Yara Boots Good qualityD myria a low top trainers , white, GeoxClassic leather woven emb trainers , coral, Reebok , Hogan Sandals - Women Hogan Sandals online on YOOX United Kingdom - 11486997VNAdidas Boots - Men Adidas Boots online on YOOX United Kingdom - 11494116OV , Primabase Sneakers - Men Primabase Sneakers online on YOOX United Kingdom - 11486494BVO.X.S. Sneakers - Women O.X.S. Sneakers online on YOOX United Kingdom - 11509943IW , Zinda Loafers - Women Zinda Loafers online on YOOX United Kingdom - 11569124QT , Leather Crown Sandals - Women Leather Crown Sandals online on YOOX United Kingdom - 11424495OC , Rag & Bone Black Meli Sneakers , Environmentally friendly Propet Madison Ankle StrapNaot Brisote Steal the show with the sleek and slouchy Brisote bootie from NaotPowerstep Endurance Tackle any adventure in comfort with these Powerstep Endurance insole insertsWOMENS Jimmy Choo Nude Proud Platforms Let our goods go out into the worldLADY Black Slip On Sneakers Sneakers Long-term reputationVasque Brown Goretex Hiking Trailing Mountain Boots/Booties , WOMENS Loeffler Randall Silver Mazzy Sneakers High-quality , ladies adidas Green Rainforest Sneakers Sneakers WholesaleWOMEN Valentino Black/Nude Rockstud Kitten Pumps Fashion ,
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.