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The market may be trading around record highs, but the Verdence Capital Advisors CIO is worried trouble is lurking.<\/p>\n
Megan Horneman, who oversees $4.1 billion in assets under management, thinks there’s too much complacency around the Aug. 1 U.S. trade deadline.<\/p>\n
“This market is pricing in the perfect situation,” she told CNBC’s “Fast Money<\/a>” on Monday.<\/p>\n In addition to tariff concerns, she lists uncertainty regarding Federal Reserve policy and overbought conditions from a technical perspective as potential issues.<\/p>\n “Once we see that [rate cuts] might be priced off the table, coinciding with the fact that we’re not quite sure what’s going to happen with the tariff perspective, I think you can see a bit of a valuation correction,” said Horneman, who’s a former Deutsche Bank senior investment strategist.<\/p>\n Horneman is particularly concerned that technical levels are signaling overbought conditions in growth stocks \u2014 including Big Tech<\/a>.<\/p>\n “These are things that we think might upset the rally that we’re seeing here,” she said.<\/p>\n Despite her short-term caution, Horneman considers herself a long-term bull and views pullbacks as opportunities. She lists international stocks among her top plays on market weakness.<\/p>\n “I’d warn that right now, they’re expensive from a valuation perspective [but] cheap compared to the U.S.,” she said. “They’ve been underloved for way too long, and I think you’re seeing some of that rotation just begin. I think that can continue.”<\/p>\n To navigate the uncertainty<\/a>, her key advice to investors right now: Make sure you’re allocated appropriately.<\/p>\n “Fast Money” trader Guy Adami also sees concerns, citing the number of retail investors driving recent market gains.<\/p>\n “Just in terms of valuation, things have gotten a tad frothy here,” he said on Monday’s show.<\/p>\n The S&P 500<\/a> closed at record highs every day last week<\/a>. As of Friday’s close, the index is 16% higher over the past three months while the tech-heavy Nasdaq<\/a> is up 21% over the same period.<\/p>\n \u2014 CNBC’s Natalie Zhang<\/a> contributed to this article.<\/p>\n