## Is Trouble Brewing Despite Record Highs?

The market is soaring, but not everyone is celebrating. Verdence Capital Advisors CIO Megan Horneman, managing over $4 billion in assets, is sounding a cautious alarm. 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 & Fed Uncertainty: She points to potential issues arising from uncertainty surrounding tariffs and Federal Reserve policy.
• Overbought Conditions: Technical indicators suggest that growth stocks, including Big Tech, are in overbought territory.
• Valuation Correction Potential: Horneman anticipates a possible valuation correction if rate cuts are taken off the table and tariff uncertainties persist.
• Long-Term Bullishness: Despite short-term concerns, she remains a long-term bull, viewing pullbacks as buying opportunities.
• International Stock Opportunity: She favors international stocks, despite their current valuation, believing they are undervalued compared to the U.S. and poised for a rotation.
• Allocation Advice: Her key advice to investors is to ensure their portfolios are appropriately allocated to weather potential market volatility.
• Retail Investor Concerns: “Fast Money” trader Guy Adami echoes concerns, noting the increasing influence of retail investors and frothy valuations.

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