## Market Highs Mask Potential Trouble, Warns Verdence Capital CIO

The stock market is currently riding high, but Megan Horneman, CIO of Verdence Capital Advisors, is sounding a cautious alarm. She believes the market is overly complacent and that several factors could trigger a correction. Here’s a breakdown of her concerns:

• Trade Deadline Concerns: Horneman is worried about the August 1st U.S. trade deadline and believes the market is pricing in an overly optimistic outcome.
• Federal Reserve Uncertainty: Uncertainty surrounding future Federal Reserve policy, particularly regarding potential rate cuts, is a concern.
• Overbought Conditions: Technical indicators suggest that growth stocks, including Big Tech, are in overbought territory.
• Valuation Correction Potential: Horneman anticipates a potential valuation correction if rate cut expectations diminish and trade uncertainties persist.
• Long-Term Bullishness: Despite short-term concerns, Horneman remains a long-term bull and views pullbacks as buying opportunities.
• International Stock Opportunity: She sees international stocks as a potential play during market weakness, despite their current valuation.
• Advice for Investors: Horneman advises investors to ensure their portfolios are appropriately allocated to navigate the current uncertainty.
• Retail Investor Influence: “Fast Money” trader Guy Adami echoes concerns, citing the influence of retail investors and frothy valuations.

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