## Is Trouble Brewing in the Market? A CIO’s Warning

The market is soaring, hitting record highs, but not everyone is celebrating. Megan Horneman, CIO of Verdence Capital Advisors, is sounding a note of caution, suggesting that investors might be getting a little too comfortable. Here’s a breakdown of her concerns:

• Trade Deadline Anxiety: Horneman is worried about the August 1st U.S. trade deadline and believes the market is overly optimistic about the outcome.
• Rate Cut Uncertainty: She’s concerned that the possibility of Federal Reserve rate cuts might be overestimated, which could trigger a market correction.
• Overbought Conditions: Technical indicators suggest that growth stocks, including Big Tech, are in overbought territory, signaling a potential pullback.
• Valuation Concerns: Both Horneman and “Fast Money” trader Guy Adami believe valuations are becoming “frothy,” especially given the recent gains.
• Long-Term Bullishness: Despite her short-term concerns, Horneman remains a long-term bull and sees pullbacks as buying opportunities, particularly in international stocks.
• Allocation Advice: Her key advice to investors is to ensure their portfolios are appropriately allocated to weather potential volatility.

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