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.Gianni Gregori® Ankle Boot - Women Gianni Gregori® Ankle Boots online on YOOX United Kingdom - 11284679MIPatrizia Pepe Ankle Boot - Women Patrizia Pepe Ankle Boots online on YOOX United Kingdom - 11517693RF , Andrea Morando Ankle Boot - Women Andrea Morando Ankle Boots online on YOOX United Kingdom - 11525254ES , Sigerson Morrison Ankle Boot - Women Sigerson Morrison Ankle Boots online on YOOX United Kingdom - 11452697BPDolce & Gabbana Boots - Women Dolce & Gabbana Boots online on YOOX United Kingdom - 11245325VS , Pierre Darré Ankle Boot - Women Pierre Darré Ankle Boots online on YOOX United Kingdom - 11524552XF , CARMELA 65700 FASHION BOOTS FOR WOMEN , Liu •Jo Shoes Sneakers - Women Liu •Jo Shoes Sneakers online on YOOX United Kingdom - 11547201WFMISS Bandolino Green Wedges The first set of comprehensive specifications for customersWOMENS Diane von Furstenberg Snake Sandals First group of customersWOMENS Jimmy Choo Brown/Denim Claire Sandals quality products , Wolverine Floorhand 2 Mid Steel Toe WP , men/women RAYE Capri Heels Fashion pattern , mens/womens PUMA Ignite PWRWarm Sneakers & Athletic PUMA comfortabilityMen/Women Steve Madden Lorie Sandals Different styles and stylesmen/women Rocket Dog Lazer Beam Heels Complete specification range , mens/womens Steve Madden Digger Oxfords Easy to useDsquared2 Loafers - Men Dsquared2 Loafers online on YOOX United Kingdom - 11259156UVmens/womens Superga 2750 Puprintw Sneaker Sneakers & Athletic Superga Latest stylesmen/women Ivanka Trump Kloverly Heels Ranked first in its classAntonio Marras Sandals - Women Antonio Marras Sandals online on YOOX United Kingdom - 11465948IVThierry Rabotin Court - Women Thierry Rabotin Courts online on YOOX United Kingdom - 11535580UN , Elisabetta Franchi Sandals - Women Elisabetta Franchi Sandals online on YOOX United Kingdom - 11095502BV , Grünland Ankle Boot - Women Grünland Ankle Boots online on YOOX United Kingdom - 44849790OQ , Salvo Barone Sneakers - Women Salvo Barone Sneakers online on YOOX United Kingdom - 11547789PIAdidas Originals Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 11564238IC , Primo Emporio Sneakers - Men Primo Emporio Sneakers online on YOOX United Kingdom - 11514973HH , Stuart Weitzman Silver New "Reversal Sandals , Various goods Eric Michael Crimson , WOMEN Tahari Tan Sandals Win highly appreciated ,
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.