## Is Trouble Brewing Beneath the Surface of the Bull Market?

The market is soaring, hitting record highs, but not everyone is celebrating. Megan Horneman, CIO of Verdence Capital Advisors, 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, potentially overlooking risks.
• Tariff Uncertainty: Concerns about tariffs and their impact on the market are a key factor.
• Fed Policy Concerns: Uncertainty surrounding Federal Reserve policy and potential shifts in interest rates is another worry.
• Overbought Conditions: Technical indicators suggest that growth stocks, including Big Tech, are overbought, signaling a potential correction.
• Valuation Correction Potential: Horneman anticipates a valuation correction if rate cuts are less likely and tariff uncertainties persist.
• Long-Term Bullish Outlook: Despite short-term caution, Horneman remains a long-term bull, viewing pullbacks as buying opportunities.
• International Stocks as a Play: She favors international stocks, which she sees as relatively undervalued compared to U.S. stocks, despite their current expense.
• Advice to Investors: Her key advice is to ensure appropriate asset allocation to navigate the current uncertainty.
• Other Concerns: “Fast Money” trader Guy Adami also sees concerns, citing the number of retail investors driving recent market gains.

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