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.Marc Jacobs Ankle Boot - Women Marc Jacobs Ankle Boots online on YOOX United Kingdom - 11455328OXTwin-Set Simona Barbieri Sandals - Women Twin-Set Simona Barbieri Sandals online on YOOX United Kingdom - 11387481DVElisabetta Franchi Court - Women Elisabetta Franchi Courts online on YOOX United Kingdom - 11228346ILEbarrito Ankle Boot - Women Ebarrito Ankle Boots online on YOOX United Kingdom - 11457355PBlady Madden Girl Nude Wedges Elegant , Diadora Heritage Equipe W S. Sw Hh - Sneakers - Women Diadora Heritage Sneakers online on YOOX United Kingdom - 11101106MP , Nike Air Max 95 Premium - Sneakers - Women Nike Sneakers online on YOOX United Kingdom - 11314546SI , mens/womens Nine West Pereo Sneaker Sneakers & Athletic Nine West Let our products go to the world , MISS Dr. Martens Burgundy Oxford Platforms Characteristic , man/woman Not Rated She Sandals Shopping promotion , men/women Chaco Marshall Sandals High grademens/womens Florsheim Mogul Moc Toe Slip-On Loafers Many varieties , mens/womens Cole Haan Zerogrand Boots Diversified new design , Kurt Geiger DONNIE - Trainers - pink , Keys Loafers - Men Keys Loafers online on YOOX United Kingdom - 11551785USA.Testoni Sneakers - Men A.Testoni Sneakers online on YOOX United Kingdom - 11543048BX , Santoni Loafers - Men Santoni Loafers online on YOOX United Kingdom - 11478578SL , Church's Loafers - Men Church's Loafers online on YOOX United Kingdom - 11485360VBman/woman GUESS Boden Sneakers & Athletic GUESS Elegant and stable packaging , Men/Women Pavement SYLVIA - Sandals King of quantityman/woman Superga 2288 Korelaw Sneakers & Athletic Superga Fast delivery , man/woman Supra Hammer Run Sneakers & Athletic Supra Crazy price , John Varvatos Sneakers - Men John Varvatos Sneakers online on YOOX United Kingdom - 11283626LHRodo Court - Women Rodo Courts online on YOOX United Kingdom - 11542248FATod's Ankle Boot - Women Tod's Ankle Boots online on YOOX United Kingdom - 11300058WCNeil Barrett Sneakers - Women Neil Barrett Sneakers online on YOOX United Kingdom - 11522517QMRecommended today Vivobarefoot Jing JingMedium cost Soft Style Vivid , Prada Beige Gold Nude Patent Leather Sport T-strap 9.5 Sandals , ladies Burberry Black Alysa Sandals Orders are welcome
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.