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 - 11525547RABrunello Cucinelli Ankle Boot - Women Brunello Cucinelli Ankle Boots online on YOOX United Kingdom - 11516302UT , Tosca Blu Shoes Sandals - Women Tosca Blu Shoes Sandals online on YOOX United Kingdom - 11571660HA , Hogan Ballet Flats - Women Hogan Ballet Flats online on YOOX United Kingdom - 11158061DK , DORKING S042607425mpi SANDALIA PLANA DE MUJERVivienne Westwood Anglomania + Melissa Sandals - Women Vivienne Westwood Anglomania + Melissa Sandals online on YOOX United Kingdom - 11366604CKVicini Tapeet Ankle Boot - Women Vicini Tapeet Ankle Boots online on YOOX United Kingdom - 11397169NVladies Tory Burch Golden Metallic Wedges First class in his class , WOMEN J.Crew Nude Sandal Wedges Orders are welcome , lady Anne Klein Black Slingbacks Sandals Good qualitymens/womens LifeStride Airy Flats International big namemen's/women's RAYE Dexter Flats The latest technology , men/women Gabor Gabor 84.169 Flats Durable servicemen/women Bella-Vita Grayson Heels Primary quality , Converse | Converse All Star Hi plimsolls in black m3310cJeffery West | Jeffery West Adamant glitter monk shoes , Submarine Boots - Men Submarine Boots online on YOOX United Kingdom - 11296875IJCamper Sneakers - Men Camper Sneakers online on YOOX United Kingdom - 11567143GXman/woman Clarks Faralyn Rise Boots Adequate supply and timely deliveryMen/Women The North Face Bridgeton Chukka Boots Year-end special promotionsKeep Originals Loafers - Men Keep Originals Loafers online on YOOX United Kingdom - 11520720UDJucca Sandals - Women Jucca Sandals online on YOOX United Kingdom - 11160334EJVans Sneakers - Women Vans Sneakers online on YOOX United Kingdom - 11059151EO , Cult Loafers - Women Cult Loafers online on YOOX United Kingdom - 11001277UN , Ash Ankle Boot - Women Ash Ankle Boots online on YOOX United Kingdom - 11212559XDMarc Ellis Loafers - Women Marc Ellis Loafers online on YOOX United Kingdom - 11256284REhjrrMBJe JANE AND THE SHOE Laurel , Online export store Justin Cappie Steel ToeSakroots Eton Embellish your casual style with this cool Eton shoesIsabel Marant White Blue and Red Wedge Sneaker 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.