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.Michael Dass Ankle Boot - Women Michael Dass Ankle Boots online on YOOX United Kingdom - 11498555JAWOMENS Nike Pink/Green Id Sneakers ExcellentZUsqgK68 men/women Baffin Verbier Boots wonderful , Katie Grand Loves Hogan Sneakers - Women Katie Grand Loves Hogan Sneakers online on YOOX United Kingdom - 11337134AK , MISS Coloriffics Clear Gl502 Formal Shoes Fashion pattern , LADY Jack Rogers Gold Liliana Sandals Elegant shape , WOMEN Charlotte Stone Black Bettina Sandals Good market , L.P. 5457 WEDGE ANKLE BOOTS FOR WOMENSams?e & Sams?e PAPILLON - Trainers - brick redmen/women Nine West Vain Boots Practical and economicalAdidas Everybody Ankle boots - carreza nero , Saucony Sneakers - Men Saucony Sneakers online on YOOX United Kingdom - 11421866NH , Angel Loafers - Men Angel Loafers online on YOOX United Kingdom - 11545631LBAlberto Guardiani Sneakers - Men Alberto Guardiani Sneakers online on YOOX United Kingdom - 11272260PP , men's/women's Hush Puppies Zella Chaste Flats Highly appreciated and widely trusted in and outCalpierre Court - Women Calpierre Courts online on YOOX United Kingdom - 11458984XDGuess Sandals - Women Guess Sandals online on YOOX United Kingdom - 11205675SFLuciano Vani Court - Women Luciano Vani Courts online on YOOX United Kingdom - 11322868HX , BeautiFeel Black Patent Criss Cross SandalsmlsdowTZ APLAUSO 9920 BALLERINAS FOR WOMENInternational choice Nike Air Precision II , Brand feast Bed Stu DreckAvenger A7231 Make your days on the worksite easier with the Avenger A7231 steel-toe workbootRoper Buzzy The Roper Buzzy slip-on shoe offers a handsome style that will complement both jeans and casual pants.