David Tepper, the billionaire founder of hedge fund Appaloosa Management, says he’s optimistic about stocks as they rise to new records.

“Still long stocks. Still short bonds," Tepper told CNBC in an interview.

The S&P 500 has risen about 10 percent since the Nov. 8 election, when Republican Donald Trump won the presidency on a platform to cut taxes, boost jobs and spend on infrastructure. The stock benchmark rose 0.1 percent to an intraday record of 2,369.45 on Monday.

Meanwhile, bonds have sold off as investors expect the Federal Reserve to raise interest rates with inflation rising and the labor market near full employment.

"Why are stocks and bonds acting differently? It's as if they're reacting to two different economies,” Tepper said on CNBC.

Meanwhile, contrarian economist David Rosenberg is warning of volatility ahead with the market finishing the year just where it started.

"Sentiment is extremely bullish and I am a notorious contrarian," he told Barron's.
"But the technicals have been positive and the market is being driven by momentum. It is not always about the fundamentals. When you get three things together—a sub-11 VIX [the CBOE Volatility Index], an 18 forward multiple, and 60%-plus bulls in Investors Intelligence— and you look at the history, you’ll see that upside to this market is extremely limited," he predicted.

• David Rosenberg Sees 'Flattish Year' for Stocks With 'Tremendous Volatility'
• Albert Edwards: Yellen's Fed Is 'Too Late to Avoid Disaster'