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.Victoria Wood Ankle Boot - Women Victoria Wood Ankle Boots online on YOOX United Kingdom - 11558155EHTory Burch Ballet Flats - Women Tory Burch Ballet Flats online on YOOX United Kingdom - 11534823NSPaola Ferri Ankle Boot - Women Paola Ferri Ankle Boots online on YOOX United Kingdom - 11225938VTConverse Jack Purcell Sneakers - Men Converse Jack Purcell Sneakers online on YOOX United Kingdom - 11250627PPNike Grandstand Ii Premium - Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11453249WVMarsell Coltello Stack Heel Asymmetric Boot , wScN2hsS man/woman Bernardo Merit Sandals Brand , Ai5eaXSf men/women Chaco Sofia Sandals durability , Vans CHAPMAN STRIPE 8CBQ2K GRANATEColors Of California Sneakers - Women Colors Of California Sneakers online on YOOX United Kingdom - 11486507IEConverse Chuck Taylor? All Star? Street Core Canvas MidLADY Aerosoles Tan & Silver Wedges Crazy price , women Chico's Red Suede Zebra Wedges auction , BEBO ELSIE - High heeled ankle boots Colour: blackSanders Boots - Men Sanders Boots online on YOOX United Kingdom - 11358254XJ , Carrano Sandals - Women Carrano Sandals online on YOOX United Kingdom - 11268654FSFragiacomo Loafers - Women Fragiacomo Loafers online on YOOX United Kingdom - 11519706XK , Guess Sandals - Women Guess Sandals online on YOOX United Kingdom - 11200461WDManas Sandals - Women Manas Sandals online on YOOX United Kingdom - 11505977DK , Puma Sneakers - Women Puma Sneakers online on YOOX United Kingdom - 11497164DL , Susana Traca Sandals - Women Susana Traca Sandals online on YOOX United Kingdom - 11253146JRRoberto Festa Loafers - Women Roberto Festa Loafers online on YOOX United Kingdom - 11545081NT , Leather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11436488UM , Christian Louboutin Brown Atlanta 85 Sandals , oFpTF7Ce SKECHERS 12293-bbk TRAINERS FOR WOMENNaturalizer Windham Find your signature look this season with the Windham sandal by Naturalizer!Magnanni Reva Take the fast lane to the top of the best dressed lists in the Magnanni RevaHush Puppies Pink / Orange Winter Ballard Rose Leather Block Sandalslady Nike Gray/Black Women's Roshes Sneakers Large selectionladies Moschino Dark Denim Sandals Different products ,
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.