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.Saucony Shadow Original W - Sneakers - Women Saucony Sneakers online on YOOX United Kingdom - 11446920VW , Proenza Schouler Ankle Boot - Women Proenza Schouler Ankle Boots online on YOOX United Kingdom - 11204660DU , Luca Valentini Boots - Women Luca Valentini Boots online on YOOX United Kingdom - 44819828KP , Enzo Angiolini Red A05 Shelby SandalsgtFlz8lG men's/women's Naturalizer Kepler Boots TRUEMoa Master Of Arts Sneakers - Women Moa Master Of Arts Sneakers online on YOOX United Kingdom - 11330127KRmens/womens New Balance Vazee Urge v1 Sneakers & Athletic New Balance A balance between toughness and hardnessCALIFERS Sandalias Plataforma Mujer Piel Ja502y26-blanco FASHION BALLERINAS FOR WOMEN , POLIN ET MOI 111913 FASHION BOOTS FOR WOMENWOMEN Giuseppe Zanotti Animal Print Wedges Cheap , Men/Women La Canadienne Kelsey Boots Very practical , mens/womens Steve Madden Eminent Boots Aesthetic appearance , man/woman Birkenstock Sarnia High Boots Direct business , Melissa VIVIENNE WESTWOOD BEACH SLIDE LEOPARD - Pool sliders , Keen WANDERER WP - Walking shoes Colour: cascade brown/dark earthman/woman LAUREN Ralph Lauren Carmondy Heels Elegant shapeman/woman adidas Pureboost X TR Zip Sneakers & Athletic adidas Innovative designBams Loafers - Women Bams Loafers online on YOOX United Kingdom - 11219124ON , Bikkembergs Sneakers - Women Bikkembergs Sneakers online on YOOX United Kingdom - 11450592OG , Piampiani Sandals - Women Piampiani Sandals online on YOOX United Kingdom - 11571276ILSergio Rossi Boots - Women Sergio Rossi Boots online on YOOX United Kingdom - 11548631HXChiara Ferragni Court - Women Chiara Ferragni Courts online on YOOX United Kingdom - 11556142RXClocharme Ballet Flats - Women Clocharme Ballet Flats online on YOOX United Kingdom - 11527785XT , Doucal's Ankle Boot - Women Doucal's Ankle Boots online on YOOX United Kingdom - 11502530OJ , Valentino Garavani Sandals - Women Valentino Garavani Sandals online on YOOX United Kingdom - 11378881IUJust Cavalli Sneakers - Men Just Cavalli Sneakers online on YOOX United Kingdom - 11570943BOHarley-Davidson Dunleer The Harley-Davidson Dunleer is a combat-style boot that has the durability and comfort for all-day wear.Tory Burch Pink Perfect Blush Annabelle Suede Bow Slide SandalsIsabel Marant Purple Bobby Suede Leather Sneakers Sneakers , woman Enzo Angiolini White Jazzmine Sandals shopping online ,
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.