## 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 cautious alarm, suggesting investors should be prepared for potential turbulence. Here’s a breakdown of her concerns:

• Trade Deadline Anxiety: Horneman believes the market is overly optimistic about the upcoming August 1st trade deadline, potentially overlooking the risks.
• Tariff & Fed Uncertainty: She points to uncertainty surrounding both trade tariffs and Federal Reserve policy as potential market headwinds.
• Overbought Conditions: From a technical analysis perspective, Horneman notes that growth stocks, including Big Tech, are showing signs of being overbought.
• Valuation Correction Possible: She anticipates a potential valuation correction if rate cuts are no longer expected and tariff concerns persist.
• Long-Term Bullish, Short-Term Cautious: While concerned about the short-term, Horneman remains a long-term bull, viewing pullbacks as buying opportunities.
• International Stocks as a Play: She suggests international stocks as a potential investment, despite current valuations, due to their relative undervaluation compared to U.S. stocks.
• Allocation is Key: Horneman advises investors to ensure their portfolios are appropriately allocated to navigate the uncertain market environment.
• Retail Investor Influence: “Fast Money” trader Guy Adami also expressed concerns, citing the influence of retail investors and frothy valuations.

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