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.Reebok F/S Hi Metallic - Sneakers - Women Reebok Sneakers online on YOOX United Kingdom - 11443588SF , Lena Milos Sandals - Women Lena Milos Sandals online on YOOX United Kingdom - 11529408PJ , Alice + Olivia Multicolor Beaded Platform Espadrille SandalsWOMENS Olivia Miller Chocolate Wedges Suitable for color , CALLAGHAN 89847.1 ZAPATO DE CU?A PARA MUJER , Aerosoles Black Women's Slip-on Wedge Hells Sandalswomens Cole Haan Cream Sandals Nice appearancemens/womens Roxy Reyes Boots Seasonal hot salemen/women Bruno Magli Chavez Boots Beautiful appearance , Court royale suede trainers , grey, Nike , Shepherd BOSSE - Slippers - antique/cognac , Men/Women Earth Breaker Sandals Very practical , Joie patent stilettos , beige, Tamaris , Adidas SPM DELA - Boots - taupe , Skechers Sport MARAUDER - Trainers - black , Puma HYBRID ROCKET NETFIT - Neutral running shoes - puma black/iron gate , man/woman Steve Madden Belle Sneaker Sneakers & Athletic Steve Madden Current shape , Daniele Alessandrini Sneakers - Men Daniele Alessandrini Sneakers online on YOOX United Kingdom - 11329224WK , Fru.It Ankle Boot - Women Fru.It Ankle Boots online on YOOX United Kingdom - 11550436GUPantofola D'oro Sneakers - Women Pantofola D'oro Sneakers online on YOOX United Kingdom - 11378594NH , Stella Mccartney Sneakers - Women Stella Mccartney Sneakers online on YOOX United Kingdom - 11573671KRStella Luna Court - Women Stella Luna Courts online on YOOX United Kingdom - 11544254QB , Philippe Model Sneakers - Women Philippe Model Sneakers online on YOOX United Kingdom - 11481049UM , Gioseppo Flip Flops - Women Gioseppo Flip Flops online on YOOX United Kingdom - 11575863JL , Stuart Weitzman Court - Women Stuart Weitzman Courts online on YOOX United Kingdom - 11493974WTmJYChqtR L'Artiste by Spring Step LaritaBxLyjscG ECCO Soft 7 Retro Tie , a good reputation in the world Clarks Un Adorn LoAuthentic guarantee Stacy Adams Tanner , VOLATILE Stark Indulge in a timeless style, the VOLATILE Stark clogs. ,
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.