Despite a recent downward GDP revision, a couple of sectors still stand to perform well, Morgan Stanley's Adam Parker said Wednesday.
"The correlation between the GDP and the S&P 500 is zero," he said. "I think it doesn't really matter."
The U.S. Commerce Department revealed a sharper GDP contraction than expected of nearly 3 percent, rather than the annualized 1 percent contraction that had been previously indicated.
On CNBC's "Halftime Report," Morgan Stanley's chief U.S. equity strategist said that sentiment is key.
"I think what matters is the market is anticipatory, right? So, as long as people believe that growth can improve, as long as people believe that the bear case in earnings isn't very likely, then the market tends to have an upward trajectory over time," he said.
Parker referenced a history of forward estimates on Wall Street.
"In 38 of those years—that's all we've had, 38 years—31 of those years they were too optimistic," he said. "All seven years they were too pessimistic were recessions or recoveries or the year after. So, there's no precedent that the analysts' estimates have been achievable four, five years into a recovery.
"So, I don't think buy-side investors really care that the base case has to be downwardly revised at all. I think what they care about is: Are earnings going to improve year over year, and will the bear case form?"
Parker said that his top sector pick remained health care, his biggest "overweight" sector for the past two years.
He added that health care was preferable over consumer staples because of "better estimates achievability, higher cash balances, more compelling valuations, returning more to the shareholder — staples, basically in a nutshell, are expensive and missing."
Parker also said he liked the productivity software space, as well as chemicals over energy or industrials, a position in place for over than a year.
"I think it continues to make sense," he added.