## 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 potential headwinds could be on the horizon. Here’s a breakdown of her concerns:

• Trade Deadline Anxiety: Horneman believes the market is overly optimistic about the upcoming August 1st U.S. trade deadline, potentially ignoring the risks.
• Tariff Troubles: Uncertainty surrounding tariffs is a key concern, adding to the market’s volatility.
• Fed Policy Uncertainty: The future direction of Federal Reserve policy is another source of worry, with potential rate cut expectations possibly being “priced off the table.”
• Overbought Conditions: Technical indicators suggest growth stocks, including Big Tech, are in overbought territory, increasing the risk of a correction.
• Long-Term Bullish, Short-Term Cautious: While concerned about short-term risks, Horneman remains a long-term bull, viewing pullbacks as buying opportunities.
• International Stocks as a Play: She suggests international stocks as a potential investment during market weakness, despite their current valuation.
• Allocation is Key: Horneman advises investors to ensure their portfolios are appropriately allocated to weather potential market volatility.
• Frothy Valuation: “Fast Money” trader Guy Adami agrees, noting that valuations have become “a tad frothy.”

Read the full article on CNBC for more details.