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.F.Lli Bruglia Ankle Boot - Women F.Lli Bruglia Ankle Boots online on YOOX United Kingdom - 11518558MR , Calvin Klein Collection Sneakers - Men Calvin Klein Collection Sneakers online on YOOX United Kingdom - 44818949VNLADY New Balance Black Sneakers High-quality , Vans Ua Prison Issue - 2Tone Leather - Sneakers - Women Vans Sneakers online on YOOX United Kingdom - 11224371EUlady Valerie Stevens Ivory Formal Shoes Perfect workmanshipladies Tory Burch Gold Thong Sandals quality productsBAMBU 89089 FASHION ANKLE BOOTS FOR WOMEN , LADY Salvatore Ferragamo Nude Sandals Cheap order , Men/Women Chinese Laundry Ultra Boots excellent qualityBoxfresh STERN - Trainers - khaki , L'INTERVALLE KENOVA - Classic ankle boots , Birkenstock MADRID - Pool sliders Colour: navy , Adidas Unisa CHESS - T-bar sandals - blackMelvin & Hamilton LANCE - Smart slip-ons Colour: woodAquazzura Sandals - Women Aquazzura Sandals online on YOOX United Kingdom - 11465749KC , Adidas Sneakers - Men Adidas Sneakers online on YOOX United Kingdom - 11581755VGOchana toe post sandals , navy blue, Les Tropeziennes Par M.BelarbiCrime London Sneakers - Men Crime London Sneakers online on YOOX United Kingdom - 11520947LA , Marechiaro 1962 Boots - Men Marechiaro 1962 Boots online on YOOX United Kingdom - 11523947MJDolfie Sneakers - Women Dolfie Sneakers online on YOOX United Kingdom - 11279033RCTod's Ankle Boot - Women Tod's Ankle Boots online on YOOX United Kingdom - 11542223DS , Adidas Originals Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 11439098KAOfficina 36 Sneakers - Men Officina 36 Sneakers online on YOOX United Kingdom - 11581645VNManolo Blahnik Light Blue Nilspain Sandalsleading the fashion Jewel Badgley Mischka Clairewoman Prada Punta Ala (Men) Sneakers At an affordable price , LADY Nina Ricci Black Sandals Used in durabilityValentino Black and White Free Rockstud SandalsLadies SCHUTZ Bronze Slate Sandals Big sale , women Marc Jacobs Pink Sandals Famous store ,
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.