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.Nike Internationalist Utility - Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11383053WLLeather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11309551CFUznSiSse men's/women's Aravon Peggy-AR Boots Cost-effective , Ovye' By Cristina Lucchi Ankle Boot - Women Ovye' By Cristina Lucchi Ankle Boots online on YOOX United Kingdom - 11530623RE , Senso Umar I - Ankle Boot - Women Senso Ankle Boots online on YOOX United Kingdom - 11556173SLlady Isabel Marant Black Shane Wedges Attractive and durable , women Mootsies Tootsies Formal Shoes settlement Price , Victoire leather block heels , black, JonakHUB HOOK - Trainers Colour: greyish/white , Head over Heels by Dune PALOMMA - Ankle boots , Men/Women Trainers , white, Nike Shoes Beautiful and charmingPS by Paul Smith MIYATA - Trainers Colour: offwhite , Greats Sneakers - Men Greats Sneakers online on YOOX United Kingdom - 11461341KVJoshua*S Sneakers - Men Joshua*S Sneakers online on YOOX United Kingdom - 11521260WQBally Loafers - Men Bally Loafers online on YOOX United Kingdom - 11475166TH , mens/womens rag & bone Adria Espadrille Loafers a wide range of productsmen's/women's Sanita Original Professional Sandra Clogs & Mules Brand feastLodi Sandals - Women Lodi Sandals online on YOOX United Kingdom - 11457791WJ , Mally Boots - Women Mally Boots online on YOOX United Kingdom - 11476270LL , Lenora Court - Women Lenora Courts online on YOOX United Kingdom - 11036880ELLerre Court - Women Lerre Courts online on YOOX United Kingdom - 11395399AXAlberto Fermani Sandals - Women Alberto Fermani Sandals online on YOOX United Kingdom - 11563035HN , Maison Margiela Court - Women Maison Margiela Courts online on YOOX United Kingdom - 44636530VA , LADY MIA Newberry Loafers Platforms diversity , Naot Norah Norah is part of the Naot Flat Elegant Collection, which runs as a narrow to medium width.Report Zerega Rock these Report Zerega booties any day of the week for any occasion. , ESTEFANIA MARCO Sandalia Estefana Marco De Charol Rosa Palo 41479 FASHION SANDALS FOR WOMENGuess Silver Jiyana Toe Loop Slide Multi SandalsWOMENS Fiorentini + Baker Grey Sandals Beautiful artLADY Cole Haan Gold Sneakers Modern technology ,
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.