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.Kendall + Kylie Court - Women Kendall + Kylie Courts online on YOOX United Kingdom - 11219097TIEbarrito Ankle Boot - Women Ebarrito Ankle Boots online on YOOX United Kingdom - 11459028WSThe Seller Court - Women The Seller Courts online on YOOX United Kingdom - 11505620PO , Leather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11526698NXDonald J. Pliner 11 Viana SandalsPhil Gatièr By Repo Ankle Boot - Women Phil Gatièr By Repo Ankle Boots online on YOOX United Kingdom - 11480023EC , Tipe E Tacchi Ankle Boot - Women Tipe E Tacchi Ankle Boots online on YOOX United Kingdom - 11533049XX , Ladies Tory Burch Natural/Gray Wedges a good reputation in the worldPANAMA JACK Sally Tropical WEDGE-HEEL SANDALS FOR WOMEN , woman Vince Camuto Blue Elika Sandals Freemen's/women's Madden Girl Beenson Boots main categorymen's/women's Nine West Yvette 3 Flats product qualityASOS DESIGN | ASOS DESIGN Positive platform heels , Moschino Loafers - Women Moschino Loafers online on YOOX United Kingdom - 11263515IX , Cult Boots - Men Cult Boots online on YOOX United Kingdom - 11474799XX , Men/Women El Naturalista Tulip NF31 Sandals A balance between toughness and hardness , Adidas Le Temps Des Cerises CHLOE - T-bar sandals - black , Adidas Kennel + Schmenger LIZ - Ankle boots - schwarz/grün/rot , Giuseppe Zanotti Sandals - Men Giuseppe Zanotti Sandals online on YOOX United Kingdom - 11394806AF , Alberto Guardiani Sneakers - Women Alberto Guardiani Sneakers online on YOOX United Kingdom - 11488611TRTod's Flip Flops - Women Tod's Flip Flops online on YOOX United Kingdom - 11431109VQCreative Ankle Boot - Women Creative Ankle Boots online on YOOX United Kingdom - 11547331WX , Paloma Barceló Sandals - Women Paloma Barceló Sandals online on YOOX United Kingdom - 11333425VL , Sophia Webster Sandals - Women Sophia Webster Sandals online on YOOX United Kingdom - 11248417MI , Bianca Di Court - Women Bianca Di Courts online on YOOX United Kingdom - 11572144KJMarc Jacobs Loafers - Women Marc Jacobs Loafers online on YOOX United Kingdom - 11486633DSKnown for its excellent quality PUMA Hybrid Rocket Runner , have fun Anne Klein ConfettiASICS GEL-451 The ASICS GEL-451 running shoe offers the ultimate in speed performance and features an innovative BOA Fit System for a precise fit , Cole Haan Tan and White Leather 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.