Cooperman: Why this is no bear market yet

Stocks have endured a rough year, but they may not fall into a bear market just yet, widely followed hedge fund manager Leon Cooperman said Friday amid a sell-off in U.S. equities.

"I'm not selling. I'm holding on because I do believe this is a growth scare and not a bear market," the billionaire CEO of Omega Advisors said on CNBC's "Fast Money: Halftime Report."

Major U.S. averages all fell around 3 percent on the day amid a plunge in oil prices and a string of disappointing economic data, including retail sales and industrial production. Both U.S. and Brent crude traded below $30 per barrel on Friday.

Leon Cooperman
Adam Jeffery | CNBC
Leon Cooperman

While he noted that recent economic data show a "soft spot," Cooperman contended that a bear market, marked by sustained selling, would look imminent with mounting signs of a recession. However, trends in job creation and unemployment do not show a coming recession, he said.

"I'm of the view that the market is going down to be bought," Cooperman said.

He also contended that stocks have not reached a level of overvaluation that would lead to a bear market.

Still, Cooperman admitted that he has been "too optimistic" about the markets. But he cautioned that BlackRock CEO Larry Fink's outlook that stocks could fall another 10 percent from Friday's premarket levels may be too pessimistic.

Cooperman also said that 1,825 to 1,850 on the S&P 500, slightly lower than where the index traded Friday, could prove to be a crucial level. He will also watch trends in the high-yield credit markets, which are "something to be concerned about."

Recent market uncertainty has tempered expectations for how quickly the Federal Reserve will normalize interest rates. The central bank had suggested it could hike as many as four times this year, after it raised rates in December for the first time in more than nine years.

On the day the Fed's policymaking committee voted to hike rates in December, Cooperman told CNBC that stock markets could handle policy tightening. Since then, though, markets have endured a rocky start to 2016, with the S&P falling nearly 9 percent so far.