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.Anna F. Ankle Boot - Women Anna F. Ankle Boots online on YOOX United Kingdom - 11521909FBLola Cruz Ankle Boot - Women Lola Cruz Ankle Boots online on YOOX United Kingdom - 11556012LDOTAZUA 23002 FASHION LOAFERS FOR WOMEN , Ivanka Trump Gold/Beach Jeweled Tones SandalsLa Femme Plus Ankle Boot - Women La Femme Plus Ankle Boots online on YOOX United Kingdom - 11559456NTTosca Blu Shoes Ballet Flats - Women Tosca Blu Shoes Ballet Flats online on YOOX United Kingdom - 11571642NQ , MARIA MARE 67101 C3274 Fucsia FASHION SANDALS FOR WOMENConverse Chuck 70 - Full Gator HiLowa MAURIA GTX - Walking bootsMen/Women Rochas RO29220-06260 Heels Easy lifeAndre CASSYA - Sandals Colour: bleuKelsi Dagger Brooklyn Devon Espadrille SandalGrenson ARLO - Classic ankle boots - snuff burnishingmens/womens Adidas Stan Smith Shoes Schuhe Excellent quality , Adidas Lola Cruz Cowboy/Biker boots - nero , Y-3 Sneakers - Men Y-3 Sneakers online on YOOX United Kingdom - 11568338XC , J.Wilton Loafers - Men J.Wilton Loafers online on YOOX United Kingdom - 11481414RLBOSS CASUAL RUMBA TENN - Trainers - dark blueAlexander Trend Boots - Men Alexander Trend Boots online on YOOX United Kingdom - 11404496BL , Vans Sneakers - Women Vans Sneakers online on YOOX United Kingdom - 11439946SR , Altraofficina Sandals - Women Altraofficina Sandals online on YOOX United Kingdom - 11552701NWVibram Sneakers - Women Vibram Sneakers online on YOOX United Kingdom - 11522898SIStonefly Sneakers - Women Stonefly Sneakers online on YOOX United Kingdom - 11467275LPNorma J.Baker Court - Women Norma J.Baker Courts online on YOOX United Kingdom - 11225168NP , viB6np17 Sperry Gold Exeter Penny Loafer , Beautiful and charming Pikolinos Tarifa 06J-5434 , Elegant and sturdy packaging ASICS Gel-Game 6Giuseppe Zanotti Multicolor Litio Fango London Tr Donna Hi Top Sneaker Crystal 8.5/ 38.5 Sneakers , LADY Tory Burch 12168263 Sneakers Known for its beautiful qualityLADY Maje Black Suede Sandals Quality and quantity guaranteed ,
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.