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.The Last Conspiracy Sneakers - Men The Last Conspiracy Sneakers online on YOOX United Kingdom - 11517056CHSenso Helene Sheep Nappa Ebony - Ballet Flats - Women Senso Ballet Flats online on YOOX United Kingdom - 11457714OSCLARKS 26132135 Palm Khaki Leather WEDGE-HEEL SANDALS FOR WOMENWomen's Tory Burch Tan Savannah Wedges Attractive and durableWOMEN Kenneth Cole Purple Jeweled Sandals Aesthetic appearance , Ladies Anthropologie Yellow Raffia Sandals Sale Italy , Men/Women Athena Alexander Koko Heels Crazy priceman/woman David Tate Logan Loafers Personalization trend , mens/womens Rocket Dog Lunar Loafers excellent quality , man/woman Clarks Emslie March Boots Most practical , Office HALKIDIKI - High heeled sandals , men/women Clergerie Questik Sandals Excellent workmanshipDr. Scholl's London - Original Collectionmen/women Lucky Brand Nightt Boots high quality productTod's Loafers - Women Tod's Loafers online on YOOX United Kingdom - 11311133SH , Vans Sneakers - Men Vans Sneakers online on YOOX United Kingdom - 11573576TATod's Sneakers - Men Tod's Sneakers online on YOOX United Kingdom - 11332447OI , Hogan Boots - Men Hogan Boots online on YOOX United Kingdom - 11505496PI , mens/womens ASICS Hypersprint? 5 Sneakers & Athletic ASICS cheap price , Vagabond Shoemakers Boots - Men Vagabond Shoemakers Boots online on YOOX United Kingdom - 11512976MU , Stokton Sneakers - Women Stokton Sneakers online on YOOX United Kingdom - 11481381ESCasadei Court - Women Casadei Courts online on YOOX United Kingdom - 11494425XH , Fornarina Sandals - Women Fornarina Sandals online on YOOX United Kingdom - 11564654WX , The Seller Court - Women The Seller Courts online on YOOX United Kingdom - 11508023GH , Tory Burch Espadrilles - Women Tory Burch Espadrilles online on YOOX United Kingdom - 11577700QK , Stella Luna Court - Women Stella Luna Courts online on YOOX United Kingdom - 11539281WAykSR9QVq ECCO Freja Slide Sandal II , Most practical Brooks Glycerin 16 , Women's J.Crew Gold Flip Flops Sandals Won highly esteemed and widely trusted at home and abroad , Black & White Leather with Leather Tie Mui Mui Prada 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.