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.Dune London Courtnee - Court - Women Dune London Courts online on YOOX United Kingdom - 11451386NR , Columbia Super Bonehead Vent Leather PFG2Black Knowlesandco. Chain Flip Flops Sandals , bepkmEeO men's/women's Sbicca Jiminy Boots durability , Tory Burch Black & Tan Patent Leather Thong Wedge Sandalslady Christian Louboutin Colorful Heel Platforms Exquisite (medium) workmanshipWomen's Keen Green Clearwater Cnx Sandals new entryRialto Multi Sequin Beads Beaded Wedge Sandals , Reef ESCAPE LUX - Pool shoes , men/women Pedro Garcia Zissi Sandals Authentic guaranteeLeather running trainers , navy blue, La Redoute CollectionsSaucony PEREGRINE 8 - Trail running shoes Colour: blue/black/vizired , Aquazzura Espadrilles - Women Aquazzura Espadrilles online on YOOX United Kingdom - 11453129LQ , Puma Sneakers - Men Puma Sneakers online on YOOX United Kingdom - 11572892TG , Premiata Boots - Men Premiata Boots online on YOOX United Kingdom - 11528774OKMunich Sneakers - Men Munich Sneakers online on YOOX United Kingdom - 11446620SKmen/women ECCO Touch Sneaker Slip-On Sneakers & Athletic ECCO List of explosionsAdidas | Adidas Soccer Tango predator 18.1 sneaker in white cm7700 , Giorgio Brato Sneakers - Men Giorgio Brato Sneakers online on YOOX United Kingdom - 11461432SOmen's/women's K-Swiss Court Classico Suede Sneakers & Athletic K-Swiss Modern and elegant fashion , Ballin Court - Women Ballin Courts online on YOOX United Kingdom - 11576248DITsd12 Loafers - Women Tsd12 Loafers online on YOOX United Kingdom - 11567529CSKallistè Boots - Women Kallistè Boots online on YOOX United Kingdom - 11363535AKPretty Ballerinas Sandals - Women Pretty Ballerinas Sandals online on YOOX United Kingdom - 11441212OFRoyal Republiq Boots - Men Royal Republiq Boots online on YOOX United Kingdom - 11417339LE , Orders are welcome Sanuk Brumeister PrimoGivenchy Sold Out Logo Runner Elastic Slip-on Men's Black Sneakers 44 Eu /11 Sneakers , ladies Prada Pink Donna Vernice Wedges shopping online , Golden Goose Deluxe Brand Iridescent Sneaker Sneakers , women Vince Camuto Butterscotch Vcx-ya Wedges Affordable ,
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.