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.Anna F. Sandals - Women Anna F. Sandals online on YOOX United Kingdom - 11359603BHMARTINELLI 12443478n-martinelli FASHION SANDALS FOR WOMEN , La Corte Della Pelle By Franco Ballin Ankle Boot - Women La Corte Della Pelle By Franco Ballin Ankle Boots online on YOOX United Kingdom - 11474910QV , Agl Attilio Giusti Leombruni Loafers - Women Agl Attilio Giusti Leombruni Loafers online on YOOX United Kingdom - 11456451KAAdidas Originals Adidas Stansmith - Sneakers - Men Adidas Originals Sneakers online on YOOX United Kingdom - 11200363NH , Diadora Heritage Equipe Ita - Sneakers - Men Diadora Heritage Sneakers online on YOOX United Kingdom - 11447458GR , lady Max Studio Black Xanti Sandals in short supplyCASTELLANISIMOS C201600-mrr ZAPATO DE SALóN PARA MUJERMango TAJE - Mules Colour: mustard yellow , New Look TASMANIA - Classic heels , Men/Women MUK LUKS Daniella Sandals featureman/woman Crocs LiteRide Flip Sandals VariousDiesel S-CLEVER LOW - Trainers - dirty white , Salewa VULTUR EVO GTX - Climbing shoes Colour: black/cactus , Mabel high heeled leather sandals , beige, Bunker , Puma VIKKY MID - High-top trainers - blackSuicoke Sandals - Men Suicoke Sandals online on YOOX United Kingdom - 11402146RV , men/women Deer Stags Station Sneakers & Athletic Deer Stags Very good classificationMen/Women another project Boots Colour: black Year-end special promotions , Pinko Sneakers - Women Pinko Sneakers online on YOOX United Kingdom - 11459776FCSuperga® Sneakers - Women Superga® Sneakers online on YOOX United Kingdom - 11486496OF , Jeffrey Campbell Sandals - Women Jeffrey Campbell Sandals online on YOOX United Kingdom - 11375718IEAlberto Guardiani Sandals - Women Alberto Guardiani Sandals online on YOOX United Kingdom - 11151580WQ , Emanuela Passeri Loafers - Women Emanuela Passeri Loafers online on YOOX United Kingdom - 11564517UHAnna F. Boots - Women Anna F. Boots online on YOOX United Kingdom - 11481069MW , Del Carlo Court - Women Del Carlo Courts online on YOOX United Kingdom - 11425964OD , Marc Ellis Sandals - Women Marc Ellis Sandals online on YOOX United Kingdom - 11398146KA , er1zSsdn Keen Austin Casual WP Bootstable quality Spring Step Bahamawomens Tory Burch Sand-251 50008647 Sandals Elegant and robust menu ,
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.