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.Giuseppe Zanotti Ankle Boot - Women Giuseppe Zanotti Ankle Boots online on YOOX United Kingdom - 11433533XXSee By Chloé Ankle Boot - Women See By Chloé Ankle Boots online on YOOX United Kingdom - 11475025ITMm6 Maison Margiela Ankle Boot - Women Mm6 Maison Margiela Ankle Boots online on YOOX United Kingdom - 11547485CC , men's/women's David Tate Karen Heels have funmen's/women's J. Renee Florentina Heels Human borderMen/Women Badgley Mischka Taft Flats Elegant appearance , Adidas Gabor Ballet pumps - pazifikmens/womens Jack Rogers Adeline Sandals economicadidas Originals CAMPUS - Trainersmen's/women's ECCO Shape 35 Pump Heels Vintage tide shoesBronx | Bronx Yellow & Green Suede Chunky Sneakers , Dsquared2 Boots - Men Dsquared2 Boots online on YOOX United Kingdom - 11547090LC , mens/womens Nike Air Max Invigor Sneakers & Athletic Nike Year-end special promotions , Saucony Sneakers - Women Saucony Sneakers online on YOOX United Kingdom - 11488866UJ , Marni Sneakers - Women Marni Sneakers online on YOOX United Kingdom - 11401444XE , Keys Sandals - Women Keys Sandals online on YOOX United Kingdom - 11554982LQ , Cuplé Boots - Women Cuplé Boots online on YOOX United Kingdom - 11543360SLLeather Crown Sneakers - Women Leather Crown Sneakers online on YOOX United Kingdom - 11436540FT , Sax Ankle Boot - Women Sax Ankle Boots online on YOOX United Kingdom - 44532421LV , Chiara Grey Court - Women Chiara Grey Courts online on YOOX United Kingdom - 11553464EW , Premiata Ankle Boot - Women Premiata Ankle Boots online on YOOX United Kingdom - 11481321BD , Massimo Santini Sneakers - Women Massimo Santini Sneakers online on YOOX United Kingdom - 11499694HX , Giuseppe Zanotti Sandals - Women Giuseppe Zanotti Sandals online on YOOX United Kingdom - 11446013IA , Stella Mccartney Sandals - Women Stella Mccartney Sandals online on YOOX United Kingdom - 11330968WQ , Great variety Propet Propet One StrapLong-term reputation SKECHERS Stamina Cutback , Tahari Mercer Resort chic is always in style. Comfort takes luxury to the next level in the Tahari Mercer sandal , LADY Liz Claiborne Dark Brown Wedges selling price , Tory Burch Brown Benjamin High Sneaker Sneakersladies Taryn Rose Green Wedges Reliable performance
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.