## Market Highs? Proceed with Caution, Says Verdence Capital CIO

The market is soaring, hitting record highs, but not everyone is popping champagne. Megan Horneman, CIO at Verdence Capital Advisors, is sounding a note of caution. With $4.1 billion under her management, she sees potential trouble brewing despite the current bullish sentiment. Here’s a breakdown of her concerns:

• Trade Deadline Anxiety: Horneman believes the market is overly optimistic about the August 1st U.S. trade deadline.
• Tariff Uncertainty: Concerns about tariffs remain a significant risk factor.
• Fed Policy Questions: Uncertainty surrounding Federal Reserve policy is another worry.
• Overbought Conditions: Technical indicators suggest that growth stocks, including Big Tech, are overbought.
• Valuation Correction Potential: Horneman anticipates a potential valuation correction if rate cuts are less likely and tariff issues persist.
• Long-Term Bullish, Short-Term Cautious: While wary in the short term, she remains a long-term bull, viewing pullbacks as buying opportunities.
• International Stocks as a Play: She favors international stocks, which she sees as undervalued compared to U.S. stocks, despite their current valuation.
• Allocation is Key: Her advice to investors is to ensure their portfolios are appropriately allocated to weather potential volatility.
• Retail Investor Influence: “Fast Money” trader Guy Adami also expressed concern, citing the role of retail investors in driving recent gains.

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