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.Maison Margiela Ankle Boot - Women Maison Margiela Ankle Boots online on YOOX United Kingdom - 11551499BIPAKERSON 24708 BOTíN PLANO DE MUJER , Women's Brunello Cucinelli Nude Sandals Queensland , Pellettieri Di Parma Boots - Men Pellettieri Di Parma Boots online on YOOX United Kingdom - 11505433AJNike Free Rn 2018 - Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11483078GL , MISS Donald J. Pliner Red Wedges Win the praise of customersLadies Nike Air Rift Sneakers Win the praise of customersAVISPAS 2326 2726 SANDALIA PLANA DE MUJER , womens Dior Black Suede Wedges Rich design , Men/Women Tommy Bahama Sade Sandals buy onlineJack & Jones JFWTRENT - Trainersmen's/women's Earth Topaz Boots Caramel, gentleman/woman Naturalizer Tinna Heels Valuable boutique , man/woman Naot Tiaki Oxfords cheap price , man/woman Hush Puppies Sayer Malia Clogs & Mules modernmens/womens Cole Haan Kilgore Plain Toe Oxfords Popular recommendationConverse CHUCK TAYLOR ALL STAR HI - High-top trainers Colour: field surplus/egret/brown , adidas Performance TERREX AGRAVIC - Trail running shoes - core black/himan/woman Reebok 3D Ultralite TR Sneakers & Athletic Reebok Affordable , Mally Boots - Women Mally Boots online on YOOX United Kingdom - 11474191JLHogan Sneakers - Women Hogan Sneakers online on YOOX United Kingdom - 11316981BMPaula Cademartori Sandals - Women Paula Cademartori Sandals online on YOOX United Kingdom - 11330602IF , Just Cavalli Court - Women Just Cavalli Courts online on YOOX United Kingdom - 11469532AJ , Maison Margiela Sneakers - Men Maison Margiela Sneakers online on YOOX United Kingdom - 11568370VB , Brown White Blue Hide Slide Sandals , hj5zzoF4 New Balance Multi Sport Insole , IS TO ME Bota Is To Me De Piel Negro 17istreet1p09 FASHION BOOTS FOR WOMEN , LADY Prada Tan Cipria Slingback Sandals Practical and economical , WOMENS Liz Claiborne Beige Wedges price concessionswomens Giorgio Armani Black Satin Sandals Repair
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.