What Happened?
Shares of document technology company Xerox (NASDAQ: XRX) jumped 1.6% in the morning session after the company announced its return to the mid-volume inkjet market with the launch of its new IJP900 Inkjet Press.
This move marked a notable strategic pivot for the company, which previously exited the inkjet manufacturing space. Xerox leaned on a partnership with Kyocera Document Solutions for its re-entry, using Kyocera's hardware expertise. The new press aimed to meet the needs of print service providers looking to tap into profitable areas like transactional printing and direct mail. The launch signaled Xerox's intent to re-establish its presence and compete in a fast-growing segment of the printing industry.
After the initial pop the shares cooled down to $3.72, up 1.8% from previous close.
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What Is The Market Telling Us
Xerox’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 2.5% on the news that the Consumer Price Index (CPI) report bolstered expectations for a Federal Reserve interest rate cut despite showing persistent inflation.
The August CPI data, a key measure of inflation, showed prices rose 2.9% annually, slightly more than economists expected. While inflation remains above the Federal Reserve's 2% target, investors were focusing on other signs of a cooling economy, particularly a weakening labor market. As a result, the market widely anticipated that the Fed would cut interest rates at its September meeting to support the economy. Investors priced in multiple rate cuts by year-end, which boosted market sentiment and sent Treasury yields lower.
Xerox is down 54.9% since the beginning of the year, and at $3.72 per share, it is trading 66.4% below its 52-week high of $11.07 from October 2024. Investors who bought $1,000 worth of Xerox’s shares 5 years ago would now be looking at an investment worth $196.87.
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