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.Marco Barbabella Ankle Boot - Women Marco Barbabella Ankle Boots online on YOOX United Kingdom - 11508802AF , Carla G. Ankle Boot - Women Carla G. Ankle Boots online on YOOX United Kingdom - 38666536OUTosca Blu Shoes Court - Women Tosca Blu Shoes Courts online on YOOX United Kingdom - 11468219BX , Soisire Soiebleu Sneakers - Women Soisire Soiebleu Sneakers online on YOOX United Kingdom - 11480697RK , By A. Loafers - Women By A. Loafers online on YOOX United Kingdom - 11517339VAKnown for its beautiful quality Trainers , black, Tamaris , MISS Chloé Red Pumps Cheap ideal , Jc Play By Jeffrey Campbell Sneakers - Women Jc Play By Jeffrey Campbell Sneakers online on YOOX United Kingdom - 11202815NF , WOMEN Zara Black 2600/201 Sandals New product , men's/women's Naturalizer Aileen Heels Practical and economicalRedskins OSTANO - Trainers - kaki , men's/women's Gabor Gabor 55.642 Boots qualitymen's/women's Louise et Cie Korella Heels Attractive fashionBikkembergs Sneakers - Men Bikkembergs Sneakers online on YOOX United Kingdom - 11450740HSMaldini Boots - Men Maldini Boots online on YOOX United Kingdom - 11538103JNMen/Women DSQUARED2 Low Sole Sneaker Sneakers & Athletic DSQUARED2 cheapestN° 21 Boots - Men N° 21 Boots online on YOOX United Kingdom - 11521565AV , Rodo Sandals - Women Rodo Sandals online on YOOX United Kingdom - 11472810LS , Henderson Sneakers - Women Henderson Sneakers online on YOOX United Kingdom - 11452437PSVictoria Wood Boots - Women Victoria Wood Boots online on YOOX United Kingdom - 11481055WKGeox Ankle Boot - Women Geox Ankle Boots online on YOOX United Kingdom - 11541968SW , Tod's Ballet Flats - Women Tod's Ballet Flats online on YOOX United Kingdom - 11300180EVTommy Hilfiger Black Chunky Heeled Sandals , ladies Giorgio Armani Black Wedges newcomerFirst quality Levi's® Shoes Etna , Ranked first in its class Base London SpencerOboz Campster The Oboz Campster sandal keeps you steady on your feet while on the trails or crossing your favorite creek.