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.Hundred 100 Ankle Boot - Women Hundred 100 Ankle Boots online on YOOX United Kingdom - 11516244TP , F.Lli Bruglia Ankle Boot - Women F.Lli Bruglia Ankle Boots online on YOOX United Kingdom - 11525516XXLoretta Pettinari Boots - Women Loretta Pettinari Boots online on YOOX United Kingdom - 11476837QK , CAYETANO GIMENEZ 15111 MULES PARA MUJER , LEVIS 226788-1955 BOTíN PLANO DE MUJER , Converse All Star Pro Leather Vulc Ox Leather/Suede - Sneakers - Women Converse All Star Sneakers online on YOOX United Kingdom - 11437701UPCinzia Soft By Mauri Moda Sneakers - Women Cinzia Soft By Mauri Moda Sneakers online on YOOX United Kingdom - 11534762NLJ|D Julie Dee Ankle Boot - Women J|D Julie Dee Ankle Boots online on YOOX United Kingdom - 11354483HM , Gianni Versace Couture Ballet Flats - Women Gianni Versace Couture Ballet Flats online on YOOX United Kingdom - 11487210QNNew Balance 247 Deconstructed - Sneakers - Women New Balance Sneakers online on YOOX United Kingdom - 11489401DB , LADY Valentino Black T-strap Rockstud Sandals On-lineman/woman Naturalizer Falza Boots Exquisite (processing) processingmens/womens SoftWalk Mission Boots New Listing , Sixtyseven ARENAL - Mules Colour: pinkCAFèNOIR High heeled boots Colour: nero , Just Cavalli Fringe and Embellished HeelsMen/Women Jewel Badgley Mischka Aliza Heels reasonable price , man/woman Dolce Vita Dixie Boots Suitable for colormens/womens Tamaris Alice 1-1-26243-29 Boots Practical and economicalAdidas Lacoste REY - Trainers - navy/gold , men/women Kenneth Cole Reaction Time Ahead Boots the most economical , Men/Women Fila BBN 84 Ice Sneakers & Athletic Fila Elegant and sturdy set mealEva Turner Court - Women Eva Turner Courts online on YOOX United Kingdom - 11301238LDJimmy Choo Sandals - Women Jimmy Choo Sandals online on YOOX United Kingdom - 11233501JK , Voile Blanche Sneakers - Men Voile Blanche Sneakers online on YOOX United Kingdom - 11534933WBLadies FLY London Wedges Preferred materialWomen's Valentino White Mw2s0019cni Sneakers economy , Stylish and charming L'Amour Des Pieds Taimah , Let our goods go to the world Hunter Norris Chelsea , MISS Lanvin Floral Espadrille Sandals Wedges Elegant ,
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.