Bloomberg Surveillance · Thursday, September 24, 2026
Osun Kwon of Wells Fargo has lowered the year-end target for the S&P 500 from 7,950 to 7,700, citing oil's significant influence on both stocks and bonds. Kwon notes that the current equity allocation versus bond allocation is at its highest level since 1969, suggesting a potential downside for equities.
“Osun Kwon of Wells Fargo trimming his year-end target to 7,700 from 7,950, writing oil has also been in the driver's seat for both stocks and bonds.”
“It's at the highest level since 1969. If you try to estimate what the fair equity allocation should be based on the cost of equity and the 5% interest rate, that number should be around 60%. That 12 percentage point gap, that's the widest level since 1969 again, and that gap has usually explained how the S & P is going to do versus the risk-free rate.”
“So that's a pretty negative setup for equities overall.”