Markets dipped Wednesday morning, but Adam Parker, Morgan Stanley's chief U.S. equity strategist, told CNBC that the outlook for the U.S. economy is looking good for the next few years.
His target for the S&P 500 this year is 2,275 or a nearly 8 percent gain.
"What we're focusing investors on is do you think the economy is improving in the U.S. and are corporate earnings going to continue to expand," Parker told CNBC's "Squawk on the Street" on Wednesday. He said his answer is yes to both of those questions. "Odds are earnings can continue to expand for another few years," he added.
Parker said that financials may stand to benefit from expectations that the Federal Reserve is going to move on interest rates sometime this year.
He's also confident that the sector will do really well.
"I think you will clearly see money flow out of these expensive defensives like utilities and telecoms into financials if people get more confident that the Fed is going to move the front end."
Parker added that energy stocks offer better risk-reward than the industrials that have revenue directly tied to capital spending from oil.