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

The market might be soaring to new heights, but not everyone is celebrating. Megan Horneman, CIO of Verdence Capital Advisors, is sounding a cautious alarm, suggesting that underlying issues could lead to a market correction. 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.
• Tariff Uncertainty: Concerns about tariffs and their impact on the market are a key worry.
• Fed Policy Concerns: Uncertainty surrounding the Federal Reserve’s future policy decisions is another factor.
• 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 cuts are less likely and tariff issues persist.
• Long-Term Bullish Outlook: Despite short-term concerns, Horneman remains a long-term bull and sees pullbacks as buying opportunities.
• International Stocks as a Play: She favors international stocks, which she believes are undervalued compared to U.S. stocks and poised for a rotation.
• Allocation Advice: Her key advice to investors is to ensure their portfolios are appropriately allocated to weather potential volatility.
• Retail Investor Influence: “Fast Money” trader Guy Adami also noted concerns, citing the number of retail investors driving market gains.

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