In describing this year’s bifurcated stock market, pundits have often found it easier to offer labels than explanations. Tech is surging while banks fall. Growth is rising as value drops. Big companies thrive while small ones struggle. Each gets part of the story right. None quite names the organizing principle.

Now, someone says he’s cracked the code: The problem with companies is people.

“I would summarize 2020 as the bear market for humans,” says Vincent Deluard, director of global macro strategy at brokerage StoneX Group Inc. “Like many things, Covid is just accelerating social transformation, concentration of wealth in a few hands, massive inequalities, competition issues and all that.”

With the coronavirus bolstering algorithmically enabled companies as old economy businesses are shuttered and people forced to stay home, firms that rely least on their employees have beaten more labor-intensive ones by 37 percentage points in 2020, according to an analysis by Deluard.

In a year when all manner of inequality is under fire — gender, racial, wealth — the stock market has drawn scrutiny as an institution that both reflects and amplifies it, where the rich get richer by taking humans out of the process. Giant technology companies have become particular lightning rods, their leaders called before Congress to defend their size and influence.

Future Bets

A common refrain in 2020, as equities surged while unemployment spiraled, has been that “the stock market isn’t the economy.” Going by Deluard’s logic, that isn’t true. The market actually is a reflection of the economy — a wager on which companies will flourish in the future.

A bet on technology firms as winners is easy to see — the Nasdaq 100 is up 33% this year. Yet deeper under the surface is a view that companies that rely less on employees will be better situated, too.

Deluard divided the S&P 500 into deciles based on a measure he calls “market value of intangible assets per employee” — the price of a company’s intellectual property and brand recognition compared with the number of people employed. The cluster with small numbers of employees relative to company value has returned 18% this year. The group with the highest labor intensiveness has seen a 19% loss.

Take MarketAxess Holdings Inc., for example, an automated bond trader whose shares are up 29% in 2020, roughly five times the S&P 500’s gain. The firm employs about 530 people, data compiled by Bloomberg show, yet has a market value of near $19 billion. By Deluard’s calculations, MarketAxess ranks highest of any S&P 500 firm on his list when considering how much the intellectual property overwhelms the contribution of humans to market capitalization.

Netflix Inc., up 51% this year, ranks No. 2 on his list. Roughly 8,600 people work for the streaming service, data show, and the company has a market value of $215 billion. The other members of the popular FAANG amalgamation plus Microsoft Corp. all land in the top group, except for Inc. which is one of the biggest employers in the S&P 500.

While every company in the megacap space is a reasonably big employer — and many of them are hiring — the trend shows up in various comparisons. Right now, the five largest companies in the S&P 500 account for 5% of the index’s overall workforce. Twenty years ago, companies with the same market heft employed twice that. Electric-vehicle maker Tesla Inc.’s worker count is a pretty robust 48,000, but the company is now more valuable than Walmart Inc., which employs 45 times more people.

The Losers

On the flip side, the five companies with the worst metrics on Deluard’s scale are a mix of financial, retail and energy firms: American International Group Inc., Diamondback Energy Inc., Ford Motor Co., Gap Inc. and Citigroup Inc. Shares of retailer Gap have fallen 12% this year, the least of the five, whereas shares of Diamondback Energy are down 57%.

The way Shawn Cruz, senior market strategist at TD Ameritrade Inc., sees it, the coronavirus crisis has continued to exacerbate income disparities, and the stock market has mirrored that.

“Equity markets have moved higher and it has reflected the actual economy we have right now — but it’s not necessarily the economy we would like to have,” Cruz said by phone. “The disparity is pretty much universally agreed upon. But I think the uncertainty is how bad it is and what shape the average household comes out of this in.”