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.Alma En Pena. Sneakers - Women Alma En Pena. Sneakers online on YOOX United Kingdom - 11514603VNPrada Black Leather Thong Slide SandalsagxBT6zu mens/womens ara Clara Heels Export , Janet & Janet Ankle Boot - Women Janet & Janet Ankle Boots online on YOOX United Kingdom - 11250699NA , Pas De Rouge Ankle Boot - Women Pas De Rouge Ankle Boots online on YOOX United Kingdom - 11513013IVJérôme Dreyfuss Ballet Flats - Women Jérôme Dreyfuss Ballet Flats online on YOOX United Kingdom - 11524162NS , Ladies Zara Black/White Men Sneakers Ideal gift for all occasionsIsabel Marant Black Marant-basket Burt Suede Sneaker Wedge SneakersWomen's Tory Burch Black /White Sandals High-quality materials , ADIDAS ORIGINALS B41513-adidas LOW-TOP TRAINERS FOR WOMENGONZALO 4300m ZAPATOS DE VESTIR PARA HOMBREPuma Gold Metallic Platform Basketball Trainer Sneakersman/woman ALDO Cone Flats Big clearance sale , Tommy Jeans FLAT - Mules , Converse Pro Leather LP - Mid , man/woman ECCO Touch Ballerina 2.0 Scale Loafers Excellent performancemens/womens Quiksilver Voyage Sneakers & Athletic Quiksilver special functionWide fit nude trainers, sizes 38-45 , pink, Castaluna , Novesta Sneakers - Men Novesta Sneakers online on YOOX United Kingdom - 11163163LAMagnanni Loafers - Men Magnanni Loafers online on YOOX United Kingdom - 11577941KLSerafini Sneakers - Women Serafini Sneakers online on YOOX United Kingdom - 11538412UKPremiata Ankle Boot - Women Premiata Ankle Boots online on YOOX United Kingdom - 11519409JK , Givenchy Ankle Boot - Women Givenchy Ankle Boots online on YOOX United Kingdom - 11117051FQs9UNH1D0 Reebok Work DMX Flex WorkVarious Patricia Green Celia CableBeautiful appearance Rebecca Minkoff Kayleighladies Dior Peeptoe Pumps Platforms King of the quantitywomen Prada Beige - Leather Sandals The newest style , LADY Versace 20455 Platforms Different styles and styleswoman Prada Nude Lux Vitello Sandals Superior quality ,
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.