Not so pretty

Stock markets remain close to their all-time highs. The S&P 500 is only 1.11% below its October 6 record, while the STOXX Europe 600 is just 2.85% below its August 7 peak (Wednesday close ).

But looking under the hood tells a very different story.

In the US, 56.3% of S&P 500 constituents (283 out of 503) are trading more than 20% below their own all-time highs. In Europe, the figure is even higher: 66.3% (398 out of 600).

A few large companies can keep market-capitalisation-weighted indices near their records, while the majority of individual stocks are struggling. This is particularly visible in the US, where the performance of the largest technology companies has dominated the indices.

For investors, there are two sides to this story. On the one hand, it highlights the fragility beneath apparently strong markets. On the other, it offers opportunities for stock pickers willing to look beyond the index.

After all, we invest in companies, not in indices.