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.Laurence Dacade Ankle Boot - Women Laurence Dacade Ankle Boots online on YOOX United Kingdom - 11363444DMHarrys Of London Sneakers - Men Harrys Of London Sneakers online on YOOX United Kingdom - 11464139GSDocksteps Ankle Boot - Women Docksteps Ankle Boots online on YOOX United Kingdom - 11478975BK , Salvatore Ferragamo Beige Gil Bow SandalsVans Old Skool Pro Blue , Claudia By Isaberi Ankle Boot - Women Claudia By Isaberi Ankle Boots online on YOOX United Kingdom - 11569061PLMarc By Marc Jacobs Sandals - Women Marc By Marc Jacobs Sandals online on YOOX United Kingdom - 11529983KRMTNG 58497 C36013 Gris FASHION FOOTWEAR FOR WOMENMISS Tory Burch Elena 85mm Sandals Many styles , BOBS from SKECHERS Bobs Phresh - Top SpotConverse CHUCK TAYLOR ALL STAR OX - Trainers Colour: mason/egret , men's/women's Mustang Trainers - stein Shoes Price reductionmen's/women's Kenneth Cole New York Val Heels Good design , Adidas Candice Cooper PLUS - High-top trainers - navy/base palmares bluAdidas ALDO FRERILLA - High heeled ankle boots - black , Schutz Court - Women Schutz Courts online on YOOX United Kingdom - 11531463TK , Rodo Sandals - Women Rodo Sandals online on YOOX United Kingdom - 11454620DFCult Sandals - Women Cult Sandals online on YOOX United Kingdom - 11419249QQ , Cafènoir Sandals - Women Cafènoir Sandals online on YOOX United Kingdom - 11381365LBRayne Court - Women Rayne Courts online on YOOX United Kingdom - 11529050ML , Skechers Sneakers - Women Skechers Sneakers online on YOOX United Kingdom - 11554787MOPinko Ankle Boot - Women Pinko Ankle Boots online on YOOX United Kingdom - 11500386TE , Giovanni Ciarpella Sandals - Women Giovanni Ciarpella Sandals online on YOOX United Kingdom - 44946535IRFrancesco Russo Court - Women Francesco Russo Courts online on YOOX United Kingdom - 11577628ITRose Rankin Sneakers - Women Rose Rankin Sneakers online on YOOX United Kingdom - 11557967HTRoberto Festa Loafers - Women Roberto Festa Loafers online on YOOX United Kingdom - 11544990RQ , Luca Valentini Court - Women Luca Valentini Courts online on YOOX United Kingdom - 11498839GN , mS2qHuQa PITILLOS 5057 SHOES FOR WOMENWOMEN Jimmy Choo Pink Ciara Wedges Excellent valueLadies Giuseppe Zanotti Platform Wedges environmentally friendly ,
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.