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.John Bakery Ankle Boot - Women John Bakery Ankle Boots online on YOOX United Kingdom - 11537671KW , Steve Madden Ankle Boot - Women Steve Madden Ankle Boots online on YOOX United Kingdom - 11467472MC , Chie Mihara Ankle Boot - Women Chie Mihara Ankle Boots online on YOOX United Kingdom - 11494504DKSuecomma Bonnie Loafers - Women Suecomma Bonnie Loafers online on YOOX United Kingdom - 11453012DDMISS Italian Shoemakers Gold Sandals Highly appreciated and widely trusted in and out , lady Manolo Blahnik Light Brown Pumps Low costsAdidas mint&berry Peep toes - redCassis c?te d'azur INDIE - Over-the-knee boots Colour: noir , Adidas Andre BALINEE - Sandals - blanc , Adidas Blundstone Classic ankle boots - black , Fila Sneakers - Men Fila Sneakers online on YOOX United Kingdom - 11582954LRAsics Sneakers - Men Asics Sneakers online on YOOX United Kingdom - 11541691QNÉs Sneakers - Men És Sneakers online on YOOX United Kingdom - 11473673AV , Adidas Peter Kaiser TESSI - Ballet pumps - silber estrela corfuOnitsuka Tiger Sneakers - Men Onitsuka Tiger Sneakers online on YOOX United Kingdom - 44629139GG , man/woman New Balance Classics ML840 Sneakers & Athletic New Balance Classics Rich on-time delivery , Casadei Espadrilles - Women Casadei Espadrilles online on YOOX United Kingdom - 11500495FP , Pinko Sneakers - Women Pinko Sneakers online on YOOX United Kingdom - 11515291RI , Icône Court - Women Icône Courts online on YOOX United Kingdom - 11521281NFSteve Madden Boots - Women Steve Madden Boots online on YOOX United Kingdom - 11469868DPSteve Madden Court - Women Steve Madden Courts online on YOOX United Kingdom - 11474606GR1725.A Ballet Flats - Women 1725.A Ballet Flats online on YOOX United Kingdom - 11569278FQLeather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11533475XV , Circus by Sam Edelman Turquoise Sneakers , Kamik Olivia You'll adore any chance to wear your Kamik Olivia boots! Bring on those rainy days!VEJA Sdu Take your look to the next step when you're running around town sporting the VEJA Sdu sneakersWomen's Ivanka Trump Cognac Studded Sandals Ideal gift for all occasionsWomen's Paul Green Sparkle Pink Platforms clearance sale , ladies Jimmy Choo Black Diva Platforms Sale ItalyHelmut Lang Black Slip- On Sneakers. Sneakers ,
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.