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EARLY START

Trump and Clinton Spar at Charity Dinner; First Lady Takes Trump to Task; U.S. Soldier Killed in Mosul; Duterte Calls for Separation Remarks Walked Back; Aired 4:30-5a ET

Aired October 21, 2016 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[04:30:45] GEORGE HOWELL, CNN ANCHOR: Donald Trump and Hillary Clinton sharing the same stage at a dinner benefitting Catholic charities. That event was supposed to be good natured. A roast. It was supposed to be funny, but like everything else in this presidential race, things turned ugly with them.

CHRISTINE ROANS, CNN ANCHOR: An American soldier killed by a roadside bomb. The first American casualty since the battle to retake Mosul began. We have a live report from Iraq ahead.

Welcome back to EARLY START this Friday morning, everybody. I'm Christine Romans.

HOWELL: And I'm George Howell. 31 minutes past the hour. And another tradition in this presidential election that's supposed to be lighthearted, it's supposed to be funny, but didn't quite play out expected.

Donald Trump's appearance at last night's Al Smith charity dinner was so incendiary at some points that Donald actually got booed. Again that was the Al Smith dinner. It's always been a good natured roast, supposed to be a break from the ugliness on the campaign trail to benefit Catholic charities. But Donald Trump apparently did not get the memo. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) PRESIDENTIAL CANDIDATE: Here she is tonight in public pretending not to hate Catholics.

(END VIDEO CLIP)

HOWELL: Boos at the Al Smith dinner. I mean, this is just unheard of. Clinton also didn't exactly hold back either. She heard a few jeers as well. With 18 days before election day, it appears this race is about to get even uglier.

We get more now from CNN's Jim Acosta.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and George, it was another reminder of just how vicious this campaign season has become. At the Al Smith dinner here in New York, an occasion where candidates normally deliver lighthearted remarks and some self-deprecating jokes, Donald Trump and Hillary Clinton instead went after each other, drawing groans and boos from the audience. Here's what happened.

(BEGIN VIDEO CLIP)

TRUMP: Hillary is so corrupt she got kicked off the Watergate Commission. How corrupt you have to be to get kicked off the Watergate Commission?

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: But Donald really is as healthy as a horse, you know, the one Vladimir Putin rides around on.

(END VIDEO CLIP)

ACOSTA: But there was one remarkable moment at the end of the speeches when Donald Trump and Hillary Clinton actually shook hands, something they could not bring themselves to do at their last debate -- Christine and George.

ROMANS: You know, despite the awkwardness -- thanks for that, Jim.

Despite the awkwardness of some the jokes and what many called the lack of civility through biting attacks, the candidates did have their moments at the Al Smith dinner. Let's take a look at some of the highlights.

(BEGIN VIDEO CLIP)

TRUMP: We have proven that we can actually be civil to each other. In fact, just before taking the dais, Hillary accidentally bumped into me and she very civilly said, "Pardon me."

(LAUGHTER AND APPLAUSE)

TRUMP: And I very politely replied, let me talk to you about that after I get into office.

CLINTON: People look at the Statue of Liberty and they see a proud symbol of our history as a nation of immigrants. A beacon of hope for people around the world. Donald looks at the Statue of Liberty and sees a four. Maybe a five if she loses the torch and tablet and changes her hair.

TRUMP: Michelle Obama gives a speech and everyone loves it. It's fantastic. They think she's absolutely great. My wife, Melania, gives the exact same speech and people get on her case.

(CHEERS AND LAUGHTER)

TRUMP: And I don't get it. I don't know why.

(CHEERS AND APPLAUSE)

[04:35:05] TRUMP: And it wasn't her fault. Stand up, Melania. Come on. She took a lot of abuse.

CLINTON: This is such a special event that I took a break from my rigorous nap schedule to be here. And as you've already heard, it's a treat for all of you, too, because usually I charge a lot for speeches like this. So tonight let's embrace the spirit of the evening. Let's come together. Remember what unites us and just rip on Ted Cruz.

(END VIDEO CLIP)

ROMANS: It's really a who's who of New York boldfaced names. You saw Rudy Giuliani back there.

HOWELL: Yes.

ROMANS: You saw my friend Maria Bartiromo, another business journalist. And, you know, this is an event that is Hillary Clinton's wheelhouse, right? She was a Democratic senator from New York. Al Smith was a four-time governor of New York, a Democrat, who ran for president unsuccessfully in 1928.

HOWELL: Right. It's interesting, though. It's almost like the timing was off. Some of the jokes just weren't funny. A little awkward.

ROMANS: On paper they were all funny, but in delivery they weren't. And I think it's because of the climate of the political season.

HOWELL: I think so.

ROMANS: There were some that landed -- I think the Melania Trump one landed very nicely. I even think Hillary Clinton's joke about the Statue of Liberty, Donald Trump would call the Statue of Liberty just a four. I thought that was really funny. And I noticed Rudy Giuliani was saying what? What did she say? I don't think he --

HOWELL: Kind of think about it for a second, yes.

ROMANS: He didn't either understand or didn't hear what she said. But I thought that was funny.

HOWELL: And at the end there was a handshake. That's a good thing. But make no doubt about it, I mean, you can sense the animosity between these two candidates.

So despite a growing chorus of criticism from both parties, Donald Trump continues to leave his options open at least when it comes to accepting the final election results. Just listen to him play to his supporters at a rally in Ohio.

(BEGIN VIDEO CLIP)

TRUMP: I will totally accept the results of this great and historic presidential election if I win.

(END VIDEO CLIP)

ROMANS: All right. Michelle Obama on the trail yesterday in Arizona taking Donald Trump to task in traditionally hostile territory. She was in Arizona on Thursday. A red state for the last 20 years. A state that Democrats are hoping to flip on November 8th. She cast Trump as a threat to America. She said he was a candidate with a vision devoid of hope.

CNN's Kyung Lah reports.

KYUNG LAH, CNN CORRESPONDENT: Well, George and Christine, the First Lady entered Republican territory, the battleground state of Arizona. She blasted Trump, saying he demeans women and he is a threat to democracy.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: The voters decide who wins and losses, period, end of story. And when a presidential candidate threatens to ignore our voices and rejects the outcome of this election, he is threatening the very idea of America itself. And we cannot stand for that. You do not keep American democracy in suspense because look, too many people have marched and protested and fought and died for this democracy.

(END VIDEO CLIP)

LAH: The first lady is the third Democratic heavyweight to swing through Arizona just this week. She's preceded by Bernie Sanders and Chelsea Clinton. Republicans here, though, say they're not worried. In 64 years, the state of Arizona has voted for a Democratic president just once -- George, Christine.

HOWELL: Kyung Lah, thank you for that report.

President Obama campaigning for Clinton in South Florida. He condemned Senator Marco Rubio for backing Trump and called out the GOP nominee casting him as un-American.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: That is not a joking matter. No, no, no. I want everybody to pay attention here. That is dangerous. Because when you try to sow the seeds of doubt in people's minds about the legitimacy of our election, that undermines our democracy. Then you are doing the work of our adversaries for them.

(END VIDEO CLIP)

ROMANS: All right. Republicans are calling out Trump, too. In North Carolina the executive director of the GOP slamming his own nominee for refusing to say he will accept the final outcome. Dallas Woodhouse telling CNN, "We are at the North Carolina Republican Party are not aware of election results being optional."

HOWELL: The Trump effect many Republicans fear may be playing out in New Hampshire. Democratic nominee Maggie Hassan, the state's governor, is opening up a sizable lead over sitting Republican Kelly Ayotte. You see it here in this new WMUR poll. Hassan has 46 percent of the vote with Ayotte eight points behind. Clinton has a double- digit lead over Trump in that state and that has Republicans worried about losing control of the Senate. [04:40:07] Early voting is under way in many states including Utah,

where voters there are clearly looking for, well, other options to Clinton and Trump. Take a look here, you see some of the write-in ballots in Salt Lake County. Look at that, Bernie Sanders and Mitt Romney. Those two names just keep popping up.

ROMANS: All right. The trade debate on the campaign trail centers around manufacturing. Both candidates want more things made in America.

(BEGIN VIDEO CLIP)

TRUMP: We're not going let our companies be raided by other companies where we lose all our jobs. We don't make our product anymore. That's very sad. If --

CLINTON: We're going to pull the country together. We're going to have trade agreements that we enforce. That's why I'm going to have a trade prosecutor for the first time in history. And we're going to enforce those agreements. And we're going to look for businesses to help us --

CHRIS WALLACE, DEBATE MODERATOR: Secretary Clinton --

CLINTON: -- by buying American products.

(END VIDEO CLIP)

ROMANS: Both candidates are keenly aware that there is this fear, this fear that there are so many jobs being lost, American factories are going out of business. But here's the disconnect. Factories are booming, but Americans might be feeling it. Look at this. Manufacturing jobs peaked in 1979 at nearly 20 million nationwide. Since then employment has dropped 40 percent, though factories have added 800,000 positions since 2010. You can see that little far right of the screen.

But U.S. manufacturers are cranking out three to five times more than the 1950s and early '60s when America was a production power house. Boeing, which makes planes in the U.S., has seen a 163 percent jump in deliveries over the past 10 years. Look at U.S. automakers. They set a sales record in 2015. Could set a new all-time high this year. Total production three times to five times the level of the 1950s and '60s. A time really when manufacturing workers look back as kind of a peak for them and for their opportunity.

So you have this crazy disconnect where yes, there are fewer jobs. But the American manufacturing sector is booming without all those extra workers.

HOWELL: And it seems though, you know, people who feel the opposite, the facts just are not --

ROMANS: Well, the thing is, is that technology, globalization, all of those things are happening with or without these trade deals.

HOWELL: Yes.

ROMANS: And manufacturing has been well.

HOWELL: Yes.

We are following the fight to retake Mosul. An American soldier has been killed on the battlefield. And Iraqi forces are facing fierce opposition from ISIS. That story ahead as EARLY START continues.

(COMMERCIAL BREAK)

[04:46:35] ROMANS: Happening today. A detention hearing for former government contractor charged with stealing thousands of classified and sensitive intelligence files. Federal prosecutors describe the crimes committed by 51-year-old Harold Thomas Martin who was arrested back in August -- they call them breathtaking, these crimes. He may face even more charges, including violations of the Espionage Act. Martin worked as an NSA contractor through the consulting firm Bose Allen Hamilton, which fired him after he was charged.

HOWELL: A judge has ruled in favor of extraditing drug lord Joaquin "El" Guzman to the U.S. to face drug and conspiracy charges but that process, it could take months. The 59-year-old drug kingpin has one more appeal available to him before he can formally be extradited. Guzman and other cartel leaders were indicted back in 2009 on charges of conspiring to bring more than 264,000 pounds of cocaine into the U.S. between 1990 in 2005.

ROMANS: A Milwaukee police officer whose fatal shooting of a black man in the summer sparked days of unrest in that city, he's now charged with sexual assault. 24-year-old Dominic Hagan Brown allegedly assaulted the victim back in August while off duty. Authorities say it happened the night after the shooting. The officer is suspended and in custody. Police are conducting an internal investigation.

HOWELL: A report by the EPA inspector general concludes that the agency waited too long to warn residents of Flint that their water was contaminated with lead. The report says the EPA had enough information and authority to issue an emergency order in Flint seven months before it actually took any action. Michigan's governor says the state accepts its share of responsibility for the Flint water crisis but insists officials at local and federal levels are also to blame.

ROMANS: The Pentagon announcing the first American combat death since the fight to retake Mosul was launched. A U.S. soldier killed in the line of duty. Iraqi forces meeting fierce resistance from ISIS fighters as they march on the country's second largest city. The extremists unleashing a wave of suicide bombers to counter the offensive.

I want to bring in CNN's Nick Paton Walsh. He's live from Irbil, Iraq. And I know it's just been hairy out there for both the Peshmerga fighters and for, you know, American coalition forces. Tell us what you know about this American fatality, Nick. NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Minimal at

this stage. I can tell you from our experience, we are seeing U.S. soldiers very much at the frontline there. The words from the Pentagon they're not involved in the assault but time and again when we see the Peshmerga move against ISIS, there are American vehicles and what look like American Special Forces very close to the first armored vehicles that make that attack. None of this, though, helped put much more light on the very sad news today of one death yesterday of one American death who appears to have died from his wounds after being Medevaced away from the battlefield.

But this is a sign, I think, of the difficulty of the fight the Peshmerga and Iraqi army in these first waves of fighting or really facing the Peshmerga themselves referring in a statement yesterday to how they'd like to see more coalition air power, be more decisive on the battlefield. We saw ourselves how they were having a tough fight to move in from the north around the territories, the planes around Mosul yesterday, and to one particular area. Very intense resistance from ISIS there, holding them back from villages that frankly from afar look very small.

[04:50:02] As well ISIS making their presence felt away from the frontlines the Peshmerga and Iraqi army choose to confront them on. In the town, the key oil town of Kirkuk today, ISIS militants attacking several government buildings there. The fighting as far as we understand potentially still ongoing. Unclear how many have died in that instance. And it's just part I think of what damage will be done to the region here more broadly in the weeks and months ahead in this what many believe is the last chapter of ISIS existence in Iraq. The question is really how long and how violent and how damaging will that chapter be. Back to you.

ROMANS: And how many fatalities and from whom. All right. Thank you so much for that, Nick. Please be careful out there. I know Michael Holmes is out there, too. Everyone be -- just be safe. Thank you.

All right, 50 minutes past the hour. There's a stock market story. A big name tech stock ready to party like it's 1999. We're going to show you an amazing comeback when we get an EARLY START on your money next.

HOWELL: 1999.

(COMMERCIAL BREAK)

[04:55:04] HOWELL: Welcome back. The Philippines, the government there is scrambling to correct the record after President Rodrigo Duterte's stunning announcement of a military and economic separation from the United States. The country's trade minister now saying economic ties with the U.S. will be maintained. President Duterte made the remarks during a state visit to China.

Let's go live to Beijing. CNN's Matt Rivers standing by this hour. Matt, good to have you with us. Let's talk about this. First of all this major declaration by a man who once told the U.S. president to go to hell. The question here is, is he truly planning for a pivot to China or does he truly mean what he says here?

MATT RIVERS, CNN CORRESPONDENT: Well, I think at first you have to take his words at face value because they do really mean something. He is the president of the Philippines and the things he says matters. And so when he got in front of this business forum and said he would be separating both military and economically from the United States, that caused shockwaves throughout the international diplomatic community.

Economically speaking, separation, we're not really sure exactly what that means. But there is a lot of business between both countries. Militarily, though, it's very clear what it means. If both sides were to separate, that means that the defense treaty, the mutual defense obligation that exist between the two countries would go away and that also means that the albeit relatively small U.S. military currently residing in the Philippines would also go away. And that could easily change the balance of power in the South China Sea. One of the hot spots in terms of geopolitics in the world today.

So there is the thought, though, that because President Duterte has the tendency to make outlandish comments that are then walked by his minister that perhaps he didn't really mean what he said. And what we've seen at least on the economic side is his cabinet minister coming out and saying look he didn't actually mean to separate economically, that he really just wants to bring China more into the fold and rely on them as well as the United States. But militarily, we haven't really heard anything from ministers in terms of walking back those comments. President Duterte set to meet with reporters late this evening in Manila, maybe we'll get some more clarity there. Back to you.

HOWELL: It is interesting, Matt. You know, even here in the political race in the United States, the concept of words matter and precision in words, you know, really have a ripple effect if the wrong thing is said. So, you know, we'll just have to see what the president really meant.

Matt Rivers live for us. Matt, thank you.

ROMANS: All right, 57 minutes past the hour. It's time for CNN's Money Stream this morning. Dow futures pointing lower. Global markets mixed after the European Central Bank chose to push off its decision on more stimulus measures until December. That's also when the U.S. Federal Reserve, by the way, meet to discuss interest rates. Most investors expect a rate hike then.

Corporate earnings also in the mix this morning. We'll get results before the bell from General Electric, McDonald's and several big regional banks.

Microsoft is about to party like it's 1999. Shares are jumping nearly 6 percent in pre-market trading after the company released a strong earnings report. Sales of its cloud computing platform have nearly doubled over the past year. That clip push Microsoft above $60. That's the share once the market opens. That would break the all-time high setback in 1999 during the dot-com boom. Home sales in the U.S. rebounding in September from a two-month slide

thanks in part to first time home buyers. This is an exciting development. Existing home sales increased 3.2 percent September. The median home price now $234,000. The most encouraging number in all of this, 34 percent of sales in September were first-time home buyers. The highest level in four years. It signals that tight inventory and high prices are easing somewhat and that wages are rising and families are able to get in on the boom in real estate.

Check out the new CNN Money Stream app. It's business news personalized. All the latest stories from CNN Money and other leading sources, too. Download it now on the App Store or Google Play.

HOWELL: EARLY START continues right now.

Donald Trump and Hillary Clinton on the same stage together. Sparring at a dinner benefitting Catholic charities. It was supposed to be good natured roast, but like everything else in this presidential race, things got kind of awkward and ugly.

ROMANS: An American soldier killed by the roadside bomb. The first American casualty since the battle to liberate Mosul began. A live report from Iraq ahead.

Good morning. Welcome to EARLY START this Friday morning. I'm Christine Romans.

HOWELL: And I'm George Howell. It is Friday, October 21st, 5:00 a.m. in the East.

And another tradition in this presidential election that is supposed to be lighthearted. It's supposed to be funny, but didn't quite play out as expected. Donald Trump's appearance at last night's Al Smith charity dinner was so incendiary at some points he actually got booed. Again this was the Al Smith dinner. It's always been a good natured roast. This is supposed to be a break from the ugliness on the campaign trail, all to benefit Catholic charities but Trump didn't actually get the memo. Listen.

(END)