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.Silvano Sassetti Ankle Boot - Women Silvano Sassetti Ankle Boots online on YOOX United Kingdom - 44925786PVLiu ?Jo Shoes Court - Women Liu ?Jo Shoes Courts online on YOOX United Kingdom - 11286108KVL' Autre Chose Loafers - Women L' Autre Chose Loafers online on YOOX United Kingdom - 11487820GNLotto Leggenda Tokyo Shibuya - Sneakers - Men Lotto Leggenda Sneakers online on YOOX United Kingdom - 11006298TWwomens Apt. 9 Gold/Bronze Wedges International choicelady Sam Edelman Brown Keith Sandals wear-resistant , Birkenstock ARIZONA - Slippers Colour: metallic coppermen/women Repetto Electra Heels Long-term reputation , Lauren Ralph Lauren SUPER SOFT BETHY - Slip-ons , Primabase Sneakers - Men Primabase Sneakers online on YOOX United Kingdom - 11332607CW , Lanvin Sneakers - Men Lanvin Sneakers online on YOOX United Kingdom - 11465345LNHogan Sneakers - Men Hogan Sneakers online on YOOX United Kingdom - 11486034VN , Moma Boots - Men Moma Boots online on YOOX United Kingdom - 11471377DLVersace Jeans Sneakers - Men Versace Jeans Sneakers online on YOOX United Kingdom - 11465293IUVersace Collection Sneakers - Men Versace Collection Sneakers online on YOOX United Kingdom - 11461072IG , Converse CHUCK TAYLOR ALL STAR '70 OX - Trainers - field surplus/black/egretSpringa Sneakers - Women Springa Sneakers online on YOOX United Kingdom - 11456721OARas Loafers - Women Ras Loafers online on YOOX United Kingdom - 11499845WF , Deimille Court - Women Deimille Courts online on YOOX United Kingdom - 11556265JTSalomon Sneakers - Women Salomon Sneakers online on YOOX United Kingdom - 11399446OE , Suicoke Ankle Boot - Women Suicoke Ankle Boots online on YOOX United Kingdom - 11474843WI , Chiara Ferragni Court - Women Chiara Ferragni Courts online on YOOX United Kingdom - 11153367XD , Taryn Rose Black Open Circle SandalsEnvironmentally friendly ECCO Comfort Everyday Insole , Attractive fashion Badgley Mischka Pippa , Splendid Flower Chic and simple, the Splendid Flower sandal will make a stylish statement with any look!Naturalizer Black Jetty Zip Fashion Sneakers / 40 Eu Sneakers , Tory Burch Black Powder Coated Logo Melinda 45mm Sandals , ladies Tory Burch Orange Gold Sandals Cheap order , Merrell Scarlet Red Evera Mj (Cycling) Sandals ,
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.