All eyes are on Russia this week as a growing package of Western financial sanctions deals a heavier-than-expected blow to the country’s economy, sparking decades of efforts by President Vladimir Putin to make the system resilient to sanctions.
To contribute to the economic shock, Corporate America and a growing number of multinational companies have joined in protesting Moscow’s military attack on Ukraine, cutting off business with Russia or taking a stand in support of Ukrainian refugees.
US and European measures, including a move to block some Russian banks from the SWIFT payment network and sanctions against Russia’s central bank, have already pushed the ruble down more than 30% and left the Moscow Stock Exchange closed on Monday. There is a sharp economic downturn, with JPMorgan warning that the country is ready to enter a recession.
The more punitive reports from multinational companies expected next week are likely to further undermine Russia’s economic picture and the way of life of its citizens.
The consequences for Russia’s financial system, even at an early stage and still growing, have already proved so consistent that Deutsche Bank strategist Jim Reed has described recent events as a “financial war”.
JPMorgan was the first Wall Street bank to pledge on the economic consequences for Russia that could follow, believing that the country’s economy could shrink by 20% quarter on quarter, saar [seasonal adjusted annualized rate]in the second quarter and about 3.5% for the year.
“These sanctions will almost certainly have an impact on the Russian economy, which now appears to be on the verge of a deep recession and the imposition of capital controls,” the JPMorgan team said.
Here is the first round of action from many big-name companies that have begun to flow in recent days:
General Motors
General Motors (GM) has said it will temporarily suspend car exports to Russia in response to its invasion of Ukraine. The Detroit-based company sells about 3,000 cars in Russia and has no factories based in the country.
“Our thoughts are with the people of Ukraine at the moment,” GM said in a statement. “The loss of life is a tragedy and our main concern is the safety of the people in the region.”
Disney
Walt Disney (DIS) has stopped filming in Russia and said it was working to provide humanitarian aid to Ukrainian refugees fleeing the country. Disney issued the following statement:
“Given the unprovoked invasion of Ukraine and the tragic humanitarian crisis, we are suspending the release of theatrical films in Russia, including Pixar’s forthcoming Turning Red. We will make future business decisions based on the evolving situation. In the meantime, given the scale of the emerging refugee crisis, we are working with our NGO partners to provide emergency and other humanitarian assistance to refugees.
Shell
Shell (SHEL) has said it will abandon all Russian operations, including its partnership with Russian energy conglomerate Gazprom.
“We are shocked by the loss of human lives in Ukraine, which we regret as a result of a senseless act of military aggression that threatens European security,” Executive Director Ben van Beurden said in a statement.
Dell
Dell Technologies (DELL) confirmed to Yahoo Finance that it has stopped selling products in Ukraine and Russia, providing the following statement:
“Our thoughts are with those families who have lost loved ones and all those affected. Our main priority at the moment is to support the members of the Ukrainian team as they try to move to a safe and secure environment. We closely monitor this situation and work with employees to deal with their personal or family situations. We stopped selling products in Ukraine and Russia. We will continue to monitor the situation closely to determine our next steps. “
The goal
Meta (FB), a parent of Facebook, banned ads from Russian state media on his website. The company also said it was in contact with the Ukrainian government and restricted access to several accounts in the country owned by Russian state media organizations at the request of officials.
“We remain vigilant of emerging trends and are ready to take further action to meet the demands of this ongoing conflict,” the company said.
Twitter (TWTR) temporarily paused ads in Ukraine and Russia “To ensure that critical public safety information is increased and not distracted by advertisements.”
Google (GOOG, GOOGL) of Alphabet Inc. ban Russian state media RT and other channels from collecting money for ads on their websites, apps and YouTube videos.
Delta Air Lines
Delta (DAL) has terminated its alliance with the leading Russian airline Aeroflot. The company withdrew its code from the services operated by Aeroflot outside Moscow’s Sheremetyevo Airport and the code from Aeroflot from the services operated by Delta from Los Angeles and New York-JFK.
Tesla, SpaceX
At the request of Deputy Prime Minister and Minister of Digital Transformation of Ukraine Mykhailo Fedorov, Tesla CEO Elon Musk said that Starlink, the Internet service offered by SpaceX, is active in Ukraine. with “more terminals on the way”. A Polish resident also posted an e-mail on Twitter stating that the electric car maker had made Superchargers in Poland, Slovakia and Hungary free to help Ukrainians trying to escape the war. Tesla did not immediately respond to Yahoo Finance’s request for more information.
Fedex, UPS
Transport giants FedEx (FDX) and UPS (UPS) have stopped deliveries to Russia.
BP
BP (BP) is selling its 19.75% stake in Russian-controlled oil company Rosneft. This move will come with a huge fee of $ 25 billion. BP has been doing business in Russia for three decades.
Intel, AMD
Intel (INTC) and AMD (AMD) have reportedly cut off chip supplies to Russia. An AMD spokesman was unable to comment on the report to Yahoo Finance. An Intel spokesman did not immediately return Yahoo Finance’s request for comment.
Airbnb
The Airbnb housing rental platform (ABNB) has promised to provide free, short-term housing for some 100,000 Ukrainian refugees fleeing the country.
Etsy
Etsy (ETSY), an online marketplace focused on handmade or vintage items, said it would cancel all balances – about $ 4 million in registration, transactions and other fees – owed by Ukrainian sellers on its platform.
HSBC
The British bank HSBC (HSBC) is expected to abandon its relations with a number of Russian banks, including the second largest, VTB, according to a Reuters report, citing an internal note.
NYSE, Nasdaq
Nasdaq Inc. and the New York Stock Exchange have suspended trading for Russian-based companies listed on their stock exchanges.
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Brian Sosie is the editor – in – chief and a leader in Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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