Between a volatile week in the stock market and a rally in the U.S. Treasury yield, Morgan Stanley's Chief U.S. Equity Strategist Adam Parker is still optimistic.

"I don't think the S&P ever goes down by 10 percent or more unless people really get afraid of an earnings recession," he said Friday on CNBC's "Fast Money." "So I think you have to think about what could introduce volatility into the earnings estimates. That's the issue."

While big-cap names are often looked at as the safety trade, Parker sees opportunity in small-cap stocks.

"I'm getting pretty interested in small caps, to be honest with you. They've sold off a lot," said Parker. "But I think about small caps this way: They're going to grow a lot faster in our base case, they have more ability to expand their margins from here, they're more nascent then the M&A cycle, and you don't really want to get too negative if M&A starts picking up."

—By CNBC's Leanne Miller