What happened

The stock market's Monday rally is continuing into Tuesday, and cruise stocks are riding the tide higher, with shares of Royal Caribbean (RCL -0.66%) gaining 5.4% this morning (as of 9:50 a.m. ET), Norwegian Cruise Line Holdings (NCLH -0.88%) rising 6.7%, and Carnival Corporation (CCL 0.67%) (CUK 0.74%) leading the pack with a 10% gain.

So what

Several factors may be operating as tailwinds to the cruise sector this morning, beginning with a bullish note from Bank of America yesterday. (In its earnings report, Bank of America CEO Brian Moynihan said consumer spending via his bank's cards and accounts rose 10% year over year in September and early October -- a bullish sign for the consumer-facing cruise sector.)

More broadly, investors may be betting that inflation -- which ran hot last month, foreshadowing a likely interest rate hike in November -- is about to peak and that the Fed will soon stop raising interest rates. (This will be good news, if true, for heavily indebted cruise stocks, whose debt costs rise when interest rates go up.)

And of course, earnings reports are just around the corner for both Royal Caribbean and Norwegian Cruise Line Holdings. The former will report on Oct. 27 and the latter just a few days later on Nov. 1, and while any earnings report holds the potential to miss, it also holds the potential to beat -- and investors may be hoping for that happier scenario.  

Now what

And yet, while I can name a few reasons why investors might be getting enthusiastic about cruise stocks today, to be perfectly honest, I don't buy any of these reasons.

Was BofA's earnings report optimistic about consumer spending? Yes. But Carnival Corporation's earnings report last month was not. The cruise industry bellwether missed Q3 earnings badly and all but promised investors it would lose money in Q4 as well. I'd expect to see more of the same from Royal Caribbean and Norwegian over the next few weeks.

Nor do I see how it's possible to rationalize hopes that consumers are spending freely (if they really are) with the idea that inflation is going to cool down enough that interest rate hikes will slow down as well. Those two possibilities are diametrically opposed, and to me, this means that interest rates are still on their way up.

And speaking of interest rates on debt...did you hear the latest news from Carnival? This morning, Carnival Corporation announced that it is taking on $1.25 billion in new debt. Management says it will use the money for "refinancing," but because interest rates have been rising, that means the new debt will almost certainly pay higher interest rates than the old debt it replaces. Carnival hasn't named a number for the new interest rate it will be paying, but in a report on the issuance this morning, Marketwatch described the new debt as "high-yield."    

I suspect that means we can assume the new interest rates Carnival will be paying on its debt are...high, and that overall, spending on servicing its $35.3 billion debt load is going up. The same goes for the interest Royal Caribbean will have to pay on its $24 billion debt load and that Norwegian will have to pay on its $14 billion debt load.

Call me a skeptic, but this just doesn't seem like a good reason to be buying cruise stocks right now.