## Is Trouble Brewing Despite Record Highs?

The market is soaring, but not everyone is celebrating. Megan Horneman, CIO of Verdence Capital Advisors, is sounding a cautious alarm, suggesting that the current rally might be built on shaky ground. 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 stemming from uncertainty surrounding tariffs and the Federal Reserve’s future policy decisions.
• Overbought Conditions: Technical indicators suggest that growth stocks, including Big Tech, are in overbought territory, increasing the risk of a correction.
• Valuation Concerns: Horneman anticipates a potential valuation correction if rate cuts are taken off the table and tariff uncertainties persist.
• Long-Term Bullishness: Despite her short-term worries, she remains a long-term bull and sees pullbacks as buying opportunities.
• International Stock Opportunity: She favors international stocks, which she sees as undervalued compared to the U.S. market.
• Allocation Advice: Her key advice to investors is to ensure their portfolios are appropriately allocated to weather potential volatility.

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