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.Aldo Castagna Ankle Boot - Women Aldo Castagna Ankle Boots online on YOOX United Kingdom - 11488403WGDolce & Gabbana Sneakers - Women Dolce & Gabbana Sneakers online on YOOX United Kingdom - 11374039KK , Giancarlo Paoli Sandals - Women Giancarlo Paoli Sandals online on YOOX United Kingdom - 11162552PV , Angela George Loafers - Women Angela George Loafers online on YOOX United Kingdom - 11534289JATiffi Ankle Boot - Women Tiffi Ankle Boots online on YOOX United Kingdom - 11471965IHYOKONO Blanca002 FASHION FOOTWEAR FOR WOMENMiu Miu Navy Denim Espadrilles Sneakers , Jeffrey Campbell Gold Mirror Sneakers Sneakers , O★M Orzo & Malto Sneakers - Men O★M Orzo & Malto Sneakers online on YOOX United Kingdom - 11523211URNike Free Run Commuter - Sneakers - Women Nike Sneakers online on YOOX United Kingdom - 11218894MEConverse Chuck Taylor? All Star? Ox - Jute Americanawomen Valentino Beige With Crystals Wedges Moderate costs , ladies bebe Veronica Platforms Stylish and charming , womens Jeffrey Campbell Beige Platforms Nice color , womens Lola Cruz Brown Platforms product quality , Adidas Bronx Cowboy/Biker boots - blackmen's/women's Jambu Simone Heels Lush designmen's/women's Nine West Raleigh Heels At an affordable price , RAID LUISA - Classic ankle boots Colour: black , Nike Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11379263LJGaudì Sneakers - Men Gaudì Sneakers online on YOOX United Kingdom - 11555534FO , Bikkembergs Boots - Men Bikkembergs Boots online on YOOX United Kingdom - 11450736RP , Diesel Sneakers - Men Diesel Sneakers online on YOOX United Kingdom - 11533488QLmen/women Paul Smith Dylan Boot Boots a good reputation in the worldmen/women adidas Originals X_PLR Sneakers & Athletic adidas Originals General product , Adidas Merrell APPROACH TALL - Winter boots - blackNew Balance Sneakers - Men New Balance Sneakers online on YOOX United Kingdom - 11570394CG , Nike Sneakers - Women Nike Sneakers online on YOOX United Kingdom - 11361922MK , Sergio Rossi Sandals - Women Sergio Rossi Sandals online on YOOX United Kingdom - 11454607QM , women J.Crew Gold Formal Shoes Special promotions at the end of the year ,
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.