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.Sam Edelman Court - Women Sam Edelman Courts online on YOOX United Kingdom - 11420744HLMiista Ankle Boot - Women Miista Ankle Boots online on YOOX United Kingdom - 11482622XNSuecomma Bonnie Sandals - Women Suecomma Bonnie Sandals online on YOOX United Kingdom - 11453070CLLara Hampton Sneakers - Women Lara Hampton Sneakers online on YOOX United Kingdom - 11119234LD , Vic Matiē Sandals - Women Vic Matiē Sandals online on YOOX United Kingdom - 11468708XQ , Lena Milos Loafers - Women Lena Milos Loafers online on YOOX United Kingdom - 11524875WJ , Armani Collezioni Court - Women Armani Collezioni Courts online on YOOX United Kingdom - 11494728TUPaloma Barceló Sandals - Women Paloma Barceló Sandals online on YOOX United Kingdom - 11515161OL , 181 By Alberto Gozzi Sneakers - Women 181 By Alberto Gozzi Sneakers online on YOOX United Kingdom - 11024610SDWOMENS ALL BLACK Furrysneak Sneakers Sneakers Known for its beautiful qualityVULCASA A426121 Negro FASHION FOOTWEAR FOR WOMENNike Black & White Flyknit Trainer SneakersMen/Women Dolce Vita Saylor Boots Outstanding styleAdidas KIOMI Ballet pumps - coral , Adidas Predator 18.3 Firm Ground BootsBe Natural Classic heels Colour: black , Nike Performance FLEX 2018 RUN - Trainers - black/whitemen's/women's Sol Sana Tessa Boot Boots have funChloé Court - Women Chloé Courts online on YOOX United Kingdom - 11520684KHA.Testoni Loafers - Men A.Testoni Loafers online on YOOX United Kingdom - 11353317DF , Buttero® Sneakers - Women Buttero® Sneakers online on YOOX United Kingdom - 11165851FDDiadora Sneakers - Women Diadora Sneakers online on YOOX United Kingdom - 11497404BB , Pedro García Sandals - Women Pedro García Sandals online on YOOX United Kingdom - 11407756HBMarc Ellis Sandals - Women Marc Ellis Sandals online on YOOX United Kingdom - 11532279KCTide shoes list Kamik Polar Fox , Modern and elegant Steve Madden EspadaChristian Louboutin Blue Boat Spa Flat White Stripe Logo Low Top Sneakers , women MIA Natural Tapas Espadrille Sandals A balance between toughness and hardnessTory Burch Light Brown Leather 1" Wedge Sandalslady Dior Champagne Metallic Sandals Carefully selected materials
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.