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 - 11364138IG , Mm6 Maison Margiela Sneakers - Women Mm6 Maison Margiela Sneakers online on YOOX United Kingdom - 11567663SI , Jeffrey Campbell Sandals - Women Jeffrey Campbell Sandals online on YOOX United Kingdom - 11472671DA , Maritan G Sneakers - Women Maritan G Sneakers online on YOOX United Kingdom - 11503571AO , womens Gold Unsure Formal Shoes uppers , womens BCBGMAXAZRIA Shyanna Leather Heel Sandals On-lineNike Air Max 1 Ultra 2.0 Essential - Sneakers - Men Nike Sneakers online on YOOX United Kingdom - 11292336QO , Golden Goose Deluxe Brand Multicolor White and Pink Mid Star Sneakers SneakersCLARKS Cleaves Vibe FASHION ANKLE BOOTS FOR WOMENecco SOFT 7 - High-top trainers Colour: blackmen/women Isola Petra Heels Long-term reputationAdidas ALDO GRILLAN - Ankle boots - blackKeen UNEEK - Walking sandals - red dahlia/rayamen/women Unisa Hoda 2 Heels Year-end special promotionsMen/Women Steve Madden Vantage Sneakers & Athletic Steve Madden Outstanding styleASICS GEL-PHOENIX 9 - Neutral running shoes Colour: deep ocean/flash yellow , men/women bernie mev. Rigged Phoenix Flats At a lower price , Carlo Soldaini Sneakers - Men Carlo Soldaini Sneakers online on YOOX United Kingdom - 11343546OKSpring Court Sneakers - Men Spring Court Sneakers online on YOOX United Kingdom - 11535438VBPrimabase Sneakers - Women Primabase Sneakers online on YOOX United Kingdom - 11332681DMCuoieria Loafers - Women Cuoieria Loafers online on YOOX United Kingdom - 11483391XV , C.Waldorf Court - Women C.Waldorf Courts online on YOOX United Kingdom - 11463416XK , Andrea Pinto Court - Women Andrea Pinto Courts online on YOOX United Kingdom - 11558330QUVic Ankle Boot - Women Vic Ankle Boots online on YOOX United Kingdom - 11422127DE , Sergio Rossi Court - Women Sergio Rossi Courts online on YOOX United Kingdom - 11011623MO , Loretta Pettinari Sandals - Women Loretta Pettinari Sandals online on YOOX United Kingdom - 11565013QI , Preventi Ankle Boot - Women Preventi Ankle Boots online on YOOX United Kingdom - 11447437GPMake full use of materials New Balance Pinnacle FlipUpper material Church's Ryder Boot , Carrucci Jefferson You can tell a lot from a gentleman's shoes, so make sure you are set to impress with a pair of the Jefferson derby shoes ,
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.