Despite recent market volatility and recession fears, one strategist remains optimistic and says that sentiment is overly negative.
Morgan Stanley's chief U.S. equity strategist, Adam Parker, told CNBC's "Fast Money Halftime Report" on Monday that recession fears are mostly overblown.
"I do think that a higher probability of a recession in the U.S. is in the prices than I think is realistic. I think the market is down too much," he said.
Parker explained that because margin expansion is more important than revenue, he doesn't think this earnings season has gone that poorly. He had previously said in a report that volatility would only persist if there were a decline in earnings. Other strategists have said that a year-over-year decline in earnings would be more indicative of an economic slowdown, and not a recession.
"Margins are still — in a lot of areas of the market — hanging in better than people thought ... I thought the earnings season was decent enough to assuage some of the fears. I do think some of the more acute part of the downturn is behind us," Parker said.
The general pessimism in the market and lowered expectations could set the U.S. up for a better-than-expected 2016. As of last week, the probability of a U.S. recession was at 24.1 percent according to CNBC's Fed survey.
"I think the U.S. could turn out to be a better place to invest than other regions of the world as the year unfolds," Parker added.