What happened 

Shares of stocks tied to consumer spending are moving higher on Tuesday on some positive economic news out of the U.S. and China. But the market's optimism soon wore off when investors realized that good economic data likely means we'll see an increase in short-term interest rates from the Federal Reserve tomorrow. 

Shares of Carnival Corporation (CCL 1.58%) were up as much as 4.9% in morning trading. MGM Resorts (MGM -1.57%) was up 3%, and Peloton Interactive (PTON -0.32%) jumped 7.4%. Shares were up 1.8%, 1.8%, and 7% respectively at 2:20 p.m. EDT. 

So what 

The Purchasing Managers' Manufacturing Index, or PMI, was 50.4 for October, which was above the estimate of 49.9 from analysts. A reading below 50 for the index indicates manufacturing is slowing, while above 50 indicates growth. The beat on this index was small, but even a little growth is seen as a positive sign in this market.

In China, shares were jumping on speculation that a zero-COVID policy could end soon. I dug into this in an article here, but the big takeaway is that the government hasn't confirmed any committee to study ending zero-COVID. However, the likelihood of ending the policy has gone up now that the Party Congress is over and China's economy is struggling. 

Add these two factors together, and the Federal Reserve's meeting today and tomorrow is expected to lead to a 75-basis-point increase in short-term interest rates. Rising rates lead investors to put less value on long-term cash flows, which is why growth stocks have struggled all year. 

Now what 

Should consumer discretionary stocks really be reacting to economic news with this kind of a move higher? I don't think that the short-term picture has changed much. Companies like Peloton and Carnival will continue to struggle with losses until there's a big shift in consumer spending or their underlying business model. 

One stock that's really well positioned for both a better-than-expected U.S. economy and an opening in China is MGM Resorts. The company owns a little over half of MGM China, which operates two casinos in Macao, and could be a huge beneficiary from a more open China. 

I think days like today are more noise than signal for investors, because there aren't earnings results driving stocks like this or solid economic news. Investors are still speculating about interest rates on a day-to-day basis, and the moves in China are based on nothing more than rumors. 

Be selective buying in a market like this. Rising interest rates and even a global recession could be on the horizon. Those will be headwinds for stocks, especially in the consumer discretionary portion of the market.