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.Le Silla Ankle Boot - Women Le Silla Ankle Boots online on YOOX United Kingdom - 11251094LBMarco Ferretti Ankle Boot - Women Marco Ferretti Ankle Boots online on YOOX United Kingdom - 11493372XBSexy Woman Open-Toe Mules - Women Sexy Woman Open-Toe Mules online on YOOX United Kingdom - 11564679XJDare Trainer Women's Trainers | Puma White-White-CERULEAN | PUMA Exclusive Savings | PUMA United StatesJil Sander Navy Ankle Boot - Women Jil Sander Navy Ankle Boots online on YOOX United Kingdom - 11517554KK , BRUNO PREMI N5905g-bruno Premi FASHION ANKLE BOOTS FOR WOMEN , POLIN ET MOI 111905 FASHION BOOTS FOR WOMEN , Men/Women Freebird Tribe Boots Selling new products , men's/women's VOLATILE Sheyla Sandals Pleasant appearance , men/women Sbicca Sorano Boots Fast deliverymen's/women's ALDO Lentina Oxfords Preferential priceConverse CHUCK TAYLOR ALL STAR OX - Trainers Colour: charcoalE8 BY MIISTA SELMA - Ankle boots Colour: black , mens/womens Nine West Vlora 3 Sandals Outstanding function , man/woman Frye Ethan Triple Monk Boots Complete specifications , Adidas Sanita MATRIX - Clogs - black , Ivy Park EMBOSSED LOGO SLIDER - Mulesmen's/women's Caterpillar Casual Charade Boots We have won praise from our customers.men's/women's Keds Champion Star Chambray Sneakers & Athletic Keds High-quality materials , Puma Sneakers - Women Puma Sneakers online on YOOX United Kingdom - 11559555EKCasadei Ankle Boot - Women Casadei Ankle Boots online on YOOX United Kingdom - 11502455JO , Ruco Line Sneakers - Women Ruco Line Sneakers online on YOOX United Kingdom - 11495678FF , Elena Iachi Sneakers - Women Elena Iachi Sneakers online on YOOX United Kingdom - 11261196BG , Giuseppe Zanotti Sneakers - Women Giuseppe Zanotti Sneakers online on YOOX United Kingdom - 11549302TCValentino Garavani Boots - Women Valentino Garavani Boots online on YOOX United Kingdom - 11454975EQCharlotte Olympia Court - Women Charlotte Olympia Courts online on YOOX United Kingdom - 11433578EG , sS47veoM Sperry Overlook Leather Smoking Slipper , Christian Louboutin Men's Veau Velours Asylium Sneaker 40 Cendre Sneakers , Sophia Webster Multicolor Leather and Suede Raya Wedge Sandals , lady Stuart Weitzman Black Nearlynude Sandals Carefully selected materials ,
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.