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.Alma En Pena. Sandals - Women Alma En Pena. Sandals online on YOOX United Kingdom - 11545957BU , Lemon Jelly Flip Flops - Women Lemon Jelly Flip Flops online on YOOX United Kingdom - 11483830BQDune London Breanne - Court - Women Dune London Courts online on YOOX United Kingdom - 11451620SCSoisire Soiebleu Sneakers - Women Soisire Soiebleu Sneakers online on YOOX United Kingdom - 11475786HU , Zoe Ankle Boot - Women Zoe Ankle Boots online on YOOX United Kingdom - 11534095TQ , Cobian Floater Jr. (Toddler/Little Kid/Big Kid)COOLWAY 48872 PLATFORM SHOES FOR WOMENDibrera By Paolo Zanoli Sneakers - Men Dibrera By Paolo Zanoli Sneakers online on YOOX United Kingdom - 11445919CRMARIA MARE 61131 C21011 Napal Negro FASHION BOOTS FOR WOMEN , WOMENS Rachel Roy Nude 'tallulah' Wedges Comfortable touch , EH 3989-glasgow FASHION ANKLE BOOTS FOR WOMEN , MARIA BARCELO M8011202-rj WEDGE-HEEL SANDALS FOR WOMEN , Dune London STARRIE - Boots Colour: blackmens/womens Splendid Rosalie Boots Very practicalmen's/women's Rieker R5470 Sneakers & Athletic Rieker Outstanding styleNike Performance FLEX TRAINER 8 - Sports shoesmen's/women's Cole Haan Gabby Sandal Heels Outstanding features , Manebí Espadrilles - Women Manebí Espadrilles online on YOOX United Kingdom - 11111258EJChurch's Loafers - Men Church's Loafers online on YOOX United Kingdom - 11518221OGRenzo Favero Loafers - Men Renzo Favero Loafers online on YOOX United Kingdom - 11544987SUCrime London Sneakers - Men Crime London Sneakers online on YOOX United Kingdom - 11295914TUD’Acquasparta Sneakers - Women D’Acquasparta Sneakers online on YOOX United Kingdom - 11492717IKGuess Ankle Boot - Women Guess Ankle Boots online on YOOX United Kingdom - 11326098OISilvian Heach Boots - Women Silvian Heach Boots online on YOOX United Kingdom - 11473112OX , Sergio Rossi Court - Women Sergio Rossi Courts online on YOOX United Kingdom - 11412047HBTod's Ankle Boot - Women Tod's Ankle Boots online on YOOX United Kingdom - 11570173MLModerate cost Corral Boots C3373Wolky Bighorn Add vibrant style to your week with the no-nonsense approach of the Wolky® Bighorn boot! , Laredo Nash The Laredo Nash boot offers a handsome, traditional style to complement your Western look.Birkenstock Black Betula Unisex Arizona Thick Suede Sandals ,
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.