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.Chocolà Ankle Boot - Women Chocolà Ankle Boots online on YOOX United Kingdom - 11525961SXVia Roma 15 Ankle Boot - Women Via Roma 15 Ankle Boots online on YOOX United Kingdom - 11274764KEGolden Goose Deluxe Brand Loafers - Women Golden Goose Deluxe Brand Loafers online on YOOX United Kingdom - 11571253FHAir Jordan Black 11 Low Retro “baron” Youth Sneakers , Foot Petals Dual Density HH - Poron , LINCE 73111 Niquel LOW-TOP TRAINERS FOR WOMEN , Salvatore Ferragamo Brown Vintage Leather Career Sandals , Donna Carolina Cowboy/Biker boots Colour: poncho neroSKECHERS Relaxed Fit?: Segment - MixonAdidas Sam Edelman HUTTON - Over-the-knee boots - black , Champion LOW CUT SHOE C.J. - Sports shoes Colour: blackMen/Women Ryka Raleigh Sneakers & Athletic Ryka online sale , Men/Women Pikolinos Alhambra W4K-0881C1 Heels Big clearance sale , Golden leather high top trainers , grey/navy, Redskins , Pollini Court - Women Pollini Courts online on YOOX United Kingdom - 11446711AF , Cafènoir Court - Women Cafènoir Courts online on YOOX United Kingdom - 11533243TVNike Sportswear KAWA SHOWER - Pool sliders - midnight navy/whiteLotto T-TOUR 600 XI - Outdoor tennis shoes - white/blueMen/Women Calvin Klein Melinda Boots Pick up at the boutique , Roberto Cavalli Loafers - Men Roberto Cavalli Loafers online on YOOX United Kingdom - 11351634KQ , Bottega Marchigiana Sneakers - Men Bottega Marchigiana Sneakers online on YOOX United Kingdom - 11296492USMarco Barbabella Court - Women Marco Barbabella Courts online on YOOX United Kingdom - 11505513FTToga Pulla Boots - Women Toga Pulla Boots online on YOOX United Kingdom - 11528302SF , Fabi Ankle Boot - Women Fabi Ankle Boots online on YOOX United Kingdom - 11305531VJ , Pf16 Ankle Boot - Women Pf16 Ankle Boots online on YOOX United Kingdom - 11494398FVwoman Fendi Yellow Platforms Exquisite workmanshipVuG08i0C ED Ellen DeGeneres Chapatcha SneakerFair price J. Renee Bambalina , Vaneli Poncia The posh Poncia pump from Vaneli adds a pretty touch to your weekday workflow , Golden Goose Deluxe Brand White Off White Superstar Sneakers Sneakers
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.