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 Shoes Court - Women Liu ?Jo Shoes Courts online on YOOX United Kingdom - 11284363WFConverse All Star Sneakers - Women Converse All Star Sneakers online on YOOX United Kingdom - 11163077UOFratelli Karida Sandals - Women Fratelli Karida Sandals online on YOOX United Kingdom - 11400073AKOnitsuka Tiger Boots - Women Onitsuka Tiger Boots online on YOOX United Kingdom - 11415703CW , Gola TRAINER SUEDE Marine / Grey , Nila & Nila Ankle Boot - Women Nila & Nila Ankle Boots online on YOOX United Kingdom - 11265240PDLoretta By Loretta Ankle Boot - Women Loretta By Loretta Ankle Boots online on YOOX United Kingdom - 11506243CAwomen Prada Silver - Formal Shoes Charming design , Ladies Stuart Weitzman Beige Wedges Very good quality , lady Christian Louboutin Pink/Black Sandals price concessionsman/woman Fergalicious Bata Boots Very good classification , man/woman Gabor Gabor 82.744 Sandals online saleD myluse f boots , black, Geox , Reebok Lifestyle Club C 85 Diamond , Adidas Ted Baker MHARIA - Ankle boots - black , Office | Office Glide derby shoes in black leather , man/woman Tkees T-bar sandals Famous storeCamper Boots - Men Camper Boots online on YOOX United Kingdom - 11555413MW , Geox Sneakers - Men Geox Sneakers online on YOOX United Kingdom - 11297143IVMen/Women Tommy Hilfiger Kinsey Sneakers & Athletic Tommy Hilfiger elegantAdidas Originals Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 11082504JB , Valleverde Sandals - Women Valleverde Sandals online on YOOX United Kingdom - 11553310RU , Geox Sneakers - Women Geox Sneakers online on YOOX United Kingdom - 11083921IL , Ballin Court - Women Ballin Courts online on YOOX United Kingdom - 11556179ITDeimille Court - Women Deimille Courts online on YOOX United Kingdom - 11552006BLIxos Ballet Flats - Women Ixos Ballet Flats online on YOOX United Kingdom - 11561986SA , P.A.R.O.S.H. Ankle Boot - Women P.A.R.O.S.H. Ankle Boots online on YOOX United Kingdom - 11246122SVLadies Report Signature Brown Ziska Platforms New varieties are introduced , womens Steve Madden Tan Jaavaa Platforms The newest stylelady Valentino Nude Rockstuds Jelly Sandals New market ,
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.