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.Thulle® By Melluso Court - Women Thulle® By Melluso Courts online on YOOX United Kingdom - 11535004GC , Twin-Set Simona Barbieri Sneakers - Women Twin-Set Simona Barbieri Sneakers online on YOOX United Kingdom - 11495991UGVic Matiē Ankle Boot - Women Vic Matiē Ankle Boots online on YOOX United Kingdom - 11547705EUNr Rapisardi Sandals - Women Nr Rapisardi Sandals online on YOOX United Kingdom - 11400854QC , Carmens Ankle Boot - Women Carmens Ankle Boots online on YOOX United Kingdom - 11489356RG , New Balance Gray Black Blue Sneakers , LADY Cole Haan Blue Sandals promotionLadies Prada Silver Vernice Sandals diversity , PWbCSmBC Men/Women Chippewa Chukka Boots cheapest , Lotto Leggenda Osaka W - Sneakers - Women Lotto Leggenda Sneakers online on YOOX United Kingdom - 11089799ROGet It Ankle Boot - Women Get It Ankle Boots online on YOOX United Kingdom - 11337488WGThe Seller Ankle Boot - Women The Seller Ankle Boots online on YOOX United Kingdom - 11487477GP , woman Frye Cognac Corrina Wedges Highly appreciated and widely trusted in and out , Valentino Pink Rockstud Trainers 38eu 8us Sneakers , Topshop Black Gold Hoopla Knot Slides Sandalswoman Gianni Bini Black Platforms Good marketUa ultrarange gore trainers , white, Vans , Suede mono trainers , pink, PumaStonefly FLUT - Trainers Colour: blackman/woman L.K. Bennett Andrea Heels Different styles and stylesMen/Women Hush Puppies Abney Chrissie Lo Sandals Crazy priceSantoni Loafers - Men Santoni Loafers online on YOOX United Kingdom - 11410171FAmens/womens ASICS Kanmei MX Sneakers & Athletic ASICS International big nameRoberto Botticelli Loafers - Men Roberto Botticelli Loafers online on YOOX United Kingdom - 11310414NUC.Waldorf Court - Women C.Waldorf Courts online on YOOX United Kingdom - 11534179DFYeezy Court - Women Yeezy Courts online on YOOX United Kingdom - 11563262OANew design Birkenstock Madrid Big Buckle , LADY dosa Gold Worn Once Wedges Highly praised and appreciated by the audience of consumersBalenciaga Black Men's Matte Effect Arena Sneakers , lady Prada Navy Waves Sandals Large selection ,
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.