Today's Headlines

Bloomberg:

• Euro-Area Economy Headed for 2-Year Slump as EU Lowers Forecast. The euro-area economy will shrink more than previously expected in 2013 as part of a two-year slump that has pushed up unemployment to a record, the European Commission said in new forecasts today. Gross domestic product in the 17-nation region will fall 0.4 percent this year, compared with a February prediction of a 0.3 percent, the Brussels-based commission said today. This follows a 0.6 percent contraction in 2012 and shows the region headed for its first ever back-to-back years of falling output. France, now projected to shrink 0.1 percent instead of growing by the same amount, joined seven other euro-area economies expected to contract this year.
• Hollande Says German Vote in September Threatens Bank-Union Plan. French President Francois Hollande said German Chancellor Angela Merkel’s bid for re-election is hindering the euro area’s push for a banking union to counter the debt crisis. “Ms. Merkel has upcoming elections in September, and cannot give the impression that she’s taking greater care of Europeans than of Germans,” Hollande said in an interview in Paris with The Wall Street Journal that was published today. “The risk is that Germany may want to wait until after its elections to move ahead on the banking union.”
• Europe Stocks Rise to Highest Since 2008 on U.S. Payrolls. European stocks advanced to the highest level since June 2008 as a report showed U.S. employment in April picked up more than forecast and the jobless rate unexpectedly dropped to a four-year low. Adidas AG (ADS) rose to the highest price since it sold shares to the public in 1995 after first-quarter profit topped analysts’ estimates. Vallourec (VK) SA, a producer of steel pipes for the oil and gas industry, soared 12 percent. Royal Bank of Scotland Group Plc fell the most in two months as first-quarter operating profit missed forecasts. Hugo Boss AG (BOSS) lost 6.1 percent.
• Fed’s Lacker Says More QE Won’t Boost Growth While Posing Risk. Federal Reserve Bank of Richmond President Jeffrey Lacker voiced opposition to bond purchases by the Fed, saying the buying probably won’t spur growth beyond 2 percent while making an exit from stimulus more challenging.
• “The benefit-cost trade-off associated with further monetary stimulus does not look promising,” Lacker said today in a speech in Richmond, Virginia. “The Fed seems to be unable to improve real growth, despite striving mightily over the last few years, and further increases in the size of our balance sheet raise the risks associated with the ‘exit process’ when it’s time to withdraw stimulus.”
• Boston Attack Boosts Pressure on Google to Twitter to Aid Police. Google Inc. (GOOG), Twitter Inc. and even Silicon Valley startups are confronting calls by law enforcement following the Boston Marathon bombings to make their products more easily used for surveillance. Police and federal agencies made record levels of requests for data from companies including Google and Twitter in months before the bombing, seeing increasing value in smartphone data, e-mails and online chats to help find and prevent terrorist plots and crime. The International Association of Police Chiefs wants Congress to update a federal law to compel more companies providing communications services to build intercept tools that allow them to conduct surveillance with court orders.
• Vinik to Shut Hedge-Fund Business to Focus on Hockey Team. Jeff Vinik, the former Fidelity Investments stock picker turned hedge-fund manager, is shutting his Vinik Asset Management LP to focus on the professional hockey team he bought in 2010 and charitable work. The firm will return all of the capital it manages for outside investors at the end of June, according to a client letter obtained by Bloomberg News. Several of his portfolio managers plan to start their own investment firms, Vinik said. “While we are very proud of our excellent long-term record of 17 percent annualized returns since we started VAM in 1996, the last 10 months have been more difficult,” Vinik said in the letter, adding that his fund is down 4.8 percent since last July. The firm has $6 billion under management as of March, according to an investor presentation. 
• Factory Orders in U.S. Decreased More Than Forecast in March. Orders placed with U.S. factories fell more than forecast in March as a cooling economy slowed demand for metals, mining equipment and military goods. The 4 percent drop in bookings was the biggest since August and followed a revised 1.9 percent gain the prior month that was smaller than previously estimated, the Commerce Department reported today in Washington. The median forecast of 58 economists in a Bloomberg survey predicted orders would fall by 2.9 percent.
• Brazil March Industrial Production Rebounds Less Than Forecast. Brazil’s industrial production rebounded less than economists forecast in March as the world’s second-biggest emerging market continues to respond slowly to government stimulus measures. Industrial output rose 0.7 percent in March after falling a revised 2.4 percent in February, the national statistics agency said today in Rio de Janeiro. The March number was lower than all but one estimate from 33 analysts surveyed by Bloomberg, whose median forecast was for a 1.3 percent jump. Production contracted 3.3 percent from the year before, the biggest drop since December 2012, compared with a median forecast for a 2.4 percent fall from 30 economists.
• Crude Advances to One-Month High as U.S. Payroll Gains. WTI for June delivery jumped $1.70, or 1.8 percent, to $95.69 a barrel at 12:49 p.m. on the Nymex after climbing to $96.04, the highest intraday level since April 3. The volume of all futures traded was 36 percent above the 100-day average for the time of day. Prices are up 3 percent this week. Crude extended gains after the front-month WTI contract broke above $95.19, the 76.4 percent retracement level on a three-month Fibonacci chart.

CNBC: 

• Job Growth Likely to Slow This Year: Goldman Sachs(GS). (video)
• New Rule Signals Kiss of Death for Pensions. A little-known rule change that allows companies to contribute fewer dollars to pension funds is signaling just how meaningless the retirement vehicle has become. "This proves that pensions are pretty much dead," said Greg McBride, chief economist at Bankrate.com. "The change is just another charade to mask the underfunding of pensions and increases the odds of having less money for retirement."  
• The Corporate Tax Game. Republicans and Democrats in Washington rarely agree on anything these days. But in recent months almost everyone seems to have coalesced around the notion that the corporate tax system is broken and needs to be fixed.

Zero Hedge: 

• April Payrolls +165,000, 7.5% Unemployment Rate, Participation Rate Flat At 1979 Levels. (graph)
• Jobs Breakdown By Age And Gender, Or No Country For Prime-Aged, Male Workers. (graphs)
• Non-Manufacturing ISM, Factory Orders Both Miss Expectations, Drop To 2012 Levels. (graph)
• The Economics Of Decline.
• Average Weekly Hours, The Law Of Large Numbers, And An April 618,000 Payroll... Decline? (graphs)

Business Insider: 

• Here's The Massive Difference In Unemployment Between People Who Do And Don't Have A College Degree. (graph)
• The First Entirely 3D-Printed Gun Is Here.
• New UN Report Calls For The Cessation Of All Military Drone Fabrication.
• GUNDLACH: Anyone Who Says Interest Rates Will Rise Soon Is 'Absolutely Wrong'.
• Anyone Who Says There's A Manufacturing Revolution In America Needs To Look At This Chart.
• Obama's Approval Rating Has Plunged To Its Worst Mark In Nine Months. The poll finds that just 45 percent approve of Obama's job in office, which is the lowest it's been since last August 4, amid the 2012 presidential campaign. Meanwhile, 53 percent said they disapprove of Obama.
• Washington Is Tired Of Jamie Dimon.
• THE SCARIEST JOBS CHART EVER. 

Chicago Tribune:

• Lives lost mean 'Benghazi' should be more than a political buzzword.

Reuters: 

• METALS-Copper leaps 6 pct on stimulus push, jobs data.

Telegraph:

• Britain can't abandon austerity for fiscal stimulus - EC. Britain's increasing debt burden and poor growth prospects means it cannot abandon austerity for fiscal stimulus measures, the European Commission has warned in its spring economic forecast.