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.Fiori Di Picche Sneakers - Women Fiori Di Picche Sneakers online on YOOX United Kingdom - 11172947RQMm6 Maison Margiela Sneakers - Women Mm6 Maison Margiela Sneakers online on YOOX United Kingdom - 11469553SQSaucony Jazz O W - Sneakers - Women Saucony Sneakers online on YOOX United Kingdom - 11545159TIBerwick 1707 Boots - Men Berwick 1707 Boots online on YOOX United Kingdom - 11342611XV , Pawelk's Ankle Boot - Women Pawelk's Ankle Boots online on YOOX United Kingdom - 11454961US4lCBSz1q Gazellan brogues , camel, KickersDibrera By Paolo Zanoli Sandals - Women Dibrera By Paolo Zanoli Sandals online on YOOX United Kingdom - 11568368PJladies Saint Laurent Fringe Sneaker Sneakers Authentic guarantee , LADY Valentino Black Stud Sandals Cheap ideal , men's/women's SoftWalk Teller Sandals Rich designmen's/women's Lamica QUADRO - Boots Brand feast , men's/women's Even&Odd High heeled sandals Durable serviceman/woman PUMA Platform Slide Sandals Selling new productsMen/Women Frye Ally Deco Stud Crisscross Sandals High-quality , Novesta Sneakers - Men Novesta Sneakers online on YOOX United Kingdom - 11521032KQ , Tod's Loafers - Men Tod's Loafers online on YOOX United Kingdom - 11135119LS , men/women Steve Madden Lonnny Boots Pick up at the boutiqueWally Walker Boots - Men Wally Walker Boots online on YOOX United Kingdom - 11511120IC , Kwots Sneakers - Women Kwots Sneakers online on YOOX United Kingdom - 11213722PQMat:20 Sandals - Women Mat:20 Sandals online on YOOX United Kingdom - 11361634JN , 1,618 Ballet Flats - Women 1,618 Ballet Flats online on YOOX United Kingdom - 11384094EJLoretta Pettinari Loafers - Women Loretta Pettinari Loafers online on YOOX United Kingdom - 11493934ADh7xrJXLj To Boot New York AalborgRoper Loaded The handsome Loaded boot from Roper provides both security and style.Dockers Privett The Dockers Privett is a handsome, yet contemporary styling that can be worn all-day!MISS Adrienne Vittadini Black Sandal Wedges Modern and stylish fashionMISS Valentino Gold Rockstud Flats Sandals Qualified productionWOMEN Beige G25501y04351 Mules Sandals The newest style , Roberto Cavalli Brown Leather Ankle Strap SandalsWomen's Escada Gold Formal Shoes price concessions
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.