Western food diplomacy was one of the first things that flourished in Russia after the Iron Curtain fell in 1989. In fact, the following year's opening of the first McDonald's (MCD) in Moscow's Pushkin Square came to "symbolize the entire opening of the USSR to the West," according to Marc Carena, former managing director of the company's Russian operations. The fast-food giant went on to plow millions of dollars into the country, eventually growing into a network of 850 restaurants and 62,000 employees.

Snapshot: Russia's invasion of Ukraine is threatening to upend three decades of investment in the country as pressure builds on corporations to respond to the conflict. Industries from oil to media have already severed or suspended their operations in Russia, and the burden to act is now spreading to the food business. While the decision may be simple, the effects are quite complex, spreading across manufacturing and supply chains, investors and banks, as well as millions of industry workers.

The Golden Arches has become the latest company to temporarily close all its locations in Russia, and while it will continue to pay its employees in the interim, the firm said it was impossible to predict when stores might reopen. Russian operations only account for 3% of McDonald's operating income, but make up 9% of its annual revenues. McDonald's also owns 84% of its restaurants in the country and is the largest taxpayer to Russia in the food industry.

Following in suit: Soon after the McDonald's decision, other well-known food companies made similar announcements. Starbucks (NASDAQ:SBUX) said it would close all of its locations in Russia, while Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) (which has even been there since the 1970s) said it was halting most sales there. Yum! Brands (NYSE:YUM) is also suspending operations at 70 company-owned KFCs and all 50 franchise-owned Pizza Huts in Russia, while consumer and food giant Unilever (NYSE:UL) has paused all imports and exports into and out of the country. (12 comments)

Oil crisis

Calling the sanction "another powerful blow to Putin's war machine," President Biden has announced a U.S. ban on Russian oil imports, as well as natural gas and other energy sources. About 8% of American imports of oil and refined products, or about 672K barrels a day, came from Russia last year, according to the Energy Information Administration. Crude continues to soar on the news, while the national average for a gallon of gas has hit $4.25 per gallon, up from $3.65 only a week ago.

CERAWeek: Down at the energy conference in Houston, Texas, Amos Hochstein, the U.S. State Department's advisor for energy security, said claims that White House policies are holding back drilling are "nonsense," blaming those on Wall Street who are "insisting on dividends and fiscal discipline in the face of a war in Europe." The Biden administration is now telling U.S. shale producers they should do "whatever it takes" to increase supply as the risk of recession rises amid a surge in inflationary pressures. "If there's a bottleneck it is on Wall Street and that's not a U.S. government problem," added Hochstein. "They should call their financiers and tell them there’s a war going on. The American public is paying the price."

On the other side of the discussion, shale executives have pointed to the administration's freeze on leases for drilling on new federal lands, the rejection of the Keystone XL and Biden's promise to "transition" away from the oil industry. "The only thing missing here is that stable regulatory environment... a policy environment that actually encourages American energy leadership rather than discourages it," said Mike Sommers, head of the American Petroleum Institute. Investors are also urging operators to pay back capital burned during debt-fueled production sprees in the leadup to the pandemic oil crash instead of spending the big bucks on new drilling campaigns.

Greener future? Some say the recent rush for energy supply supports the push for renewable energy source in the long term and even underscores the risks of reliance on hydrocarbons. "I think this is the last gasp for fossil-fuel production," said Cheryl Smith, a portfolio manager for the Green Century Balanced Fund. "I don't think consumers have forgotten the last hurricane season. I don't think they’ve forgotten the last flood season. And I think that they kind of see that vulnerability." However, the ability to source key metals used for alternative energy purposes, such as nickel for batteries, has also been on a rip as of late, and it can take years to develop mines or create enough renewable infrastructure. (14 comments)

Cloud boost

Google (GOOG, GOOGL) is scooping up cybersecurity firm Mandiant (MNDT) for $5.4B in cash, in a big bet on the industry amid an increasing wave of cyberattacks. Upon the close of the acquisition, Mandiant will join Google Cloud, where sales rose by 45% to $5.5B in Q4, or about 7% of the company's total quarterly revenue. The deal should help Google diversify away from digital advertising by offering a set of security programs to help cloud-computing customers detect and fight cyber intrusions.

Major ripple: "In a massive growth backdrop for cyber security and further tailwinds seen during this Ukraine invasion from Russia bad actors/nation state attacks, we believe today's deal is the tip of the iceberg to a massive phase of consolidation potentially ahead for the cloud space," Wedbush's Dan Ives wrote in a note to clients. "In a nutshell this deal was a shot across the bow from Google to Microsoft (MSFT) and Amazon (AMZN) with this flagship cyber security acquisition of Mandiant."

Mandiant developed a reputation in the cyber industry by releasing detailed reports on malicious cyber campaigns and identifying the likely sponsors of the hacks. U.S. intelligence agencies even came to rely on the insights provided by Mandiant, which rose to prominence in February 2013 after releasing a report that directly implicated China in cyber espionage. Later that year, the company was acquired by the cybersecurity firm FireEye, but was spun out of the business last year after a long period of stagnant growth.

Statement: "I don't look at this as selling my baby. I look at it as moving the mission forward," declared CEO Kevin Mandia, an Air Force veteran who founded Mandiant in 2004. (18 comments)

Crypto policy

Whoops! Currencies across the cryptoverse took off overnight after the inadvertent publishing of remarks from Treasury Secretary Janet Yellen (see movement below). In a statement that was posted to the Treasury's website - which has since been deleted - Yellen voiced a balanced approach to the development of the crypto sector, as well as a constructive stance on regulating the industry. The declaration is set to be republished later today, but traders have already made a quick buck off the accidental release.

Excerpt: "A presidential executive order on cryptocurrencies would 'support responsible innovation' as it coordinates U.S. policy across agencies. Under the executive order, Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems. As we take on this important work, we'll be guided by consumer and investor protection groups, market participants, and other leading experts. Treasury will work to promote a fairer, more inclusive, and more efficient financial system, while building on our ongoing work to counter illicit finance, and prevent risks to financial stability and national security."

Some work to form the government's crypto policy has already been done, like last year's stablecoin report from the President's Working Group on Financial Markets. Congressional committees in recent months have also ramped up hearings on cryptocurrency, but the new executive order will coordinate a broader strategy for the nearly $2T crypto market. The Treasury will also work with international partners "to promote robust standards and a level playing field."

The gains: Bitcoin (BTC-USD) +8% to $41,791, Ethereum (ETH-USD) +7% to $2,730, Bitcoin Cash (BCH-USD) +6% to $300, Monero (XMR-USD) +23% to $199, Litecoin (LTC-USD) +5% to $106, Terra (LUNA-USD) +20% to $97.23, Solana (SOL-USD) +7% to $89.23, Cardano (ADA-USD) +4% to $0.85 and XRP (XRP-USD) +5% to $0.75. (31 comments)

Today's Markets

In Asia, Japan -0.3%. Hong Kong -0.7%. China -1.1%. India +2.3%.
In Europe, at midday, London +1.7%. Paris +4.6%. Frankfurt +4.5%.
Futures at 6:20, Dow +1.5%. S&P +1.7%. Nasdaq +2%. Crude +1.2% to $125.20. Gold -1.4% to $2014.70. Bitcoin +8.1% to $41,791.
Ten-year Treasury Yield +3 bps to 1.9%

Today's Economic Calendar

7:00 MBA Mortgage Applications
10:00 Job Openings and Labor Turnover Survey
10:30 EIA Petroleum Inventories
1:00 PM Results of $34B, 10-Year Note Auction

Companies reporting earnings today »

What else is happening...

New iPhone SE, Friday Night MLB highlight Apple (AAPL) product event.

Lululemon (LULU) rolls into footwear market with women's-first approach.

LME halted nickel trading after prices spiked above $100K/ton.

Putin signs decree to restrict imports and exports until year end.

Interactive Brokers (IBKR) launches global stock trading app.

Netflix (NFLX) won't say 'never' to ads, as rivals set up cheaper tiers.

DiDi Global (DIDI) drops as Ant Group (BABA) said to delay IPO.

Oil price spike nearing demand destruction levels - ConocoPhillips (COP).

EOG (EOG), Devon (DVN) hold thousands of untapped oil drilling permits.