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.Carla G. Ankle Boot - Women Carla G. Ankle Boots online on YOOX United Kingdom - 11522946SJ , MISS Steve Madden Brown Beaded Wedges Orders are welcomewomens Dolce&Gabbana Logo Embellished Leather Sandals Qualified production , women J.Crew Brown Cream Lila Wedges qualityAdidas Zign Over-the-knee boots - vision , men/women Born Lena Heels German Outlets , man/woman Anne Klein Elanore Heels Online , Bianca Di Classic heels Colour: nero/cipria/blancoASOS DESIGN | ASOS DESIGN Potion premium leather high heelsLowa TAURUS GTX - Hiking shoes - anthrazit/grün , man/woman Indigo Rd. Pindee2 Heels Quality and quantity guaranteedPuma | Puma Suede Bow Valentines Sneakers In Pink , Tommy Hilfiger SUMMIT - Trainers - light grey , men's/women's Kelsi Dagger Brooklyn Kingston Boots Fine artHogan Loafers - Women Hogan Loafers online on YOOX United Kingdom - 11299825SH , Seboy's Boots - Men Seboy's Boots online on YOOX United Kingdom - 11554551QW , Saucony Sneakers - Men Saucony Sneakers online on YOOX United Kingdom - 11526176XQ , 2Star Sneakers - Women 2Star Sneakers online on YOOX United Kingdom - 11550861WFKeys Sandals - Women Keys Sandals online on YOOX United Kingdom - 11548848JACasadei Boots - Women Casadei Boots online on YOOX United Kingdom - 11542760NJ , Hogan Court - Women Hogan Courts online on YOOX United Kingdom - 11300305JC , Paola Ferri Boots - Women Paola Ferri Boots online on YOOX United Kingdom - 11225658OB , Anna F. Sandals - Women Anna F. Sandals online on YOOX United Kingdom - 11527998PVMtng Ankle Boot - Women Mtng Ankle Boots online on YOOX United Kingdom - 11541467NE , Moma Ankle Boot - Women Moma Ankle Boots online on YOOX United Kingdom - 11516691JT , viVS4HSL WOMEN Beige/Black Wedges Qualified production , High-quality materials Old Friend KentuckyStylish and fun Oboz Juniper Lowdiscount price JBU Mermaid Tooreliable quality Levi's Shoes Etna
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.