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.Liu ?Jo Ankle Boot - Women Liu ?Jo Ankle Boots online on YOOX United Kingdom - 11498927HC , Emanuela Passeri Ballet Flats - Women Emanuela Passeri Ballet Flats online on YOOX United Kingdom - 11331737POLaura Bellariva Sneakers - Women Laura Bellariva Sneakers online on YOOX United Kingdom - 11410115ST , Ladies Salvatore Ferragamo Nella Wedges New , men/women Ryka Belmar Sandals Speed refundAsh COCA Brown / YellowPANAMA JACK Dori Run B2 Napa Marino SANDALIA PLANA DE MUJERMTNG 51599 C27784 Karma Negro FASHION FOOTWEAR FOR WOMEN , Converse Army Green Star Chuck Taylor Ox Sneakers , NOCLAIM Glory Hole LOW-TOP TRAINERS FOR WOMENHOBBY 601-hobby ZAPATO DE SALóN PARA MUJER , Jack Rogers Miss Lauren (Little Kid/Big Kid)mens/womens Vaneli Lailie Heels Low price , Men/Women ECCO Sneak Sneakers & Athletic ECCO New designAdidas L37 DAYDREAM - Ballet pumps - red , Ewing SPORT LITE - High-top trainers Colour: white/grey/blueMalouine bt wellington boots , sapphire blue, Aigle , Malìparmi Loafers - Women Malìparmi Loafers online on YOOX United Kingdom - 11019452TW , Avril Gau Court - Women Avril Gau Courts online on YOOX United Kingdom - 11430415EHButtero® Ankle Boot - Women Buttero® Ankle Boots online on YOOX United Kingdom - 44994301BKPepe Jeans Sneakers - Women Pepe Jeans Sneakers online on YOOX United Kingdom - 11308416ILLemaré Ankle Boot - Women Lemaré Ankle Boots online on YOOX United Kingdom - 11233327OHProenza Schouler Sandals - Women Proenza Schouler Sandals online on YOOX United Kingdom - 11400877HGAm4awQI8 Wolverine 1000 Mile 1940 Boot , UvXBgueo SKECHERS S012131368bbo ZAPATILLA CON PLATAFORMAPick up at the boutique Eric Michael Havana , Kork-Ease Mindo Freshen up your fall collection with the fine Kork-Ease Mindo booties , CELIA COMPANY Zapato Dkt De Piel Negro 6402 ZAPATO DE CU?A PARA MUJER , Donald J. Pliner Orange Ginie Toe Ring Wedge Slide 337 Poppy Sandals , Puma Black and White Women's My-82 Black/White 357085-01 Sneakers
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.