Investing.com -- Shares of private prison operators CoreCivic (NYSE:CXW) and GEO Group saw an uptick in the market, with CoreCivic climbing 2.3% and GEO Group inching up 0.5%. The movement comes in response to President Donald Trump's recent executive actions on immigration, which include revoking previous orders from the Biden administration aimed at rebuilding the refugee program.
The actions taken by President Trump on his first day in office have led to the suspension of refugee resettlement and the reinstatement of the policy that requires migrants at the U.S. southern border to remain in Mexico while their court appearances are pending. Furthermore, the president has terminated a parole program that had provided a legal pathway for entry to migrants from Cuba, Haiti, Nicaragua, and Venezuela.
The cancellation of these programs is expected to increase the demand for detention facilities managed by companies like CoreCivic and GEO Group, which is reflected in the positive market response to their stocks. The president's executive order has also led to the discontinuation of the 'CBP One' application, a tool that allowed migrants to electronically request immigration appointments at the U.S. southern border, and the 'Processes for Cubans, Haitians, Nicaraguans, and Venezuelans' program.
In his inauguration speech, President Trump announced plans to deploy troops to the U.S. southern border to counter what he referred to as "the disastrous invasion of our country" and to designate drug cartels as foreign terrorist organizations. Despite a decrease in attempted border crossings in December to the lowest point since 2019, the president has declared a national emergency at the southern border.
The executive actions taken by President Trump are poised to have a significant impact on the operations of private prison companies. With the revocation of Biden's orders and the suspension of programs that offered alternative pathways for migrants, the reliance on detention facilities is anticipated to grow, which could potentially benefit CoreCivic and GEO Group.
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