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 - 11526889TW , Roberto Festa Ankle Boot - Women Roberto Festa Ankle Boots online on YOOX United Kingdom - 11486202NJGordana Dimitrijevi? Ankle Boot - Women Gordana Dimitrijevi? Ankle Boots online on YOOX United Kingdom - 11330851TJF.Lli Bruglia Loafers - Women F.Lli Bruglia Loafers online on YOOX United Kingdom - 11520312JMSam Edelman Grey York Studded Sandalslady Cole Haan Cream Black Wedges A balance between toughness and hardnesswomens Black Suede Heels Formal Shoes Strong heat and heat resistance , IGI AND CO 4775 ZAPATO DE CU?A PARA MUJERwomen Prada White/Bianco Spazzolato Fior Platforms Reliable quality , Men/Women Dr. Martens Allana Boots good qualityAdidas LEMON JELLY SAPHIRE - Platform sandals - white , Gardenia GIONA - Slingback ballet pumps Colour: eclat silver , men's/women's IVY KIRZHNER Cannes Heels First batch of customersMen/Women Sperry Aerial Beck Boots Cheaper than the pricemens/womens Rockport World Explorer Chelsea Boots Crazy price, Birmingham , New Look Wide Fit WIDE FIT IMMALINE - T-bar sandalsman/woman Jewel Badgley Mischka Jovana Boots Elegant and stable packagingHundred 100 Boots - Men Hundred 100 Boots online on YOOX United Kingdom - 11506257FPSilvano Sassetti Loafers - Men Silvano Sassetti Loafers online on YOOX United Kingdom - 11457319LOman/woman Lucky Brand Khlonn Boots Highly appreciated and widely trusted in and out , Lilimill Sandals - Women Lilimill Sandals online on YOOX United Kingdom - 11154790XE , Marian Court - Women Marian Courts online on YOOX United Kingdom - 11563518HWCastañer Sandals - Women Castañer Sandals online on YOOX United Kingdom - 11305739SHPedro García Sandals - Women Pedro García Sandals online on YOOX United Kingdom - 11407812SC , Marni Open-Toe Mules - Women Marni Open-Toe Mules online on YOOX United Kingdom - 11401681XOCjbptwUC ECCO Track 25 Premium Low , WLtTHpkx SKECHERS 23437 BALLERINAS FOR WOMEN , Magnanni Caitin This pair takes inspiration from formal footwear and elevates them to a sophisticated status , ladies Charlotte Olympia Black Meredith Wedges Special promotions at the end of the year , WOMENS Jimmy Choo Purple Chiara Wedges Comfort ,
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.