NEW YORK (TheStreet) -- Stock markets have been rattled by the lack of progress in debt talks between Greece and its lenders. But while a default would cause a disruption in the markets, it would "not be fatal," according to John Manley, chief equity strategist at Wells Fargo Funds.
"It's not going to be fun," said Manley, describing the day of a potential default. "The market is not going to go up that day, and it may not go up for a while after that, but I don't think that it's going to go down an awful lot."
Manley made his comments after weekend talks between Greece and its lenders deadlocked, and speculation escalated about a Greek debt default. Greece faces a deadline at the end of this month to repay a large amount of debt to the International Monetary Fund. When asked if a default is already priced into the markets, Manley responded, 'Nothing is ever priced in, because there's always the hope. Wall Street tends to be a very optimistic place by nature."
Manley also said he's not worried that the Greek drama will prompt a correction on Wall Street, because Federal Reserve policies have been so supportive for the market, and while the Fed will raise rates in the not-so-distant future, they won't do so this week. The Federal Open Market Committee begins its two-day meeting on Tuesday.
Manley said there are several sectors of the market set to outperform even in the face of the current uncertainty. He likes financials stocks, which will benefit once the Fed does start to raise rates. He also likes technology, opining that he doesn't think the upgrade cycle is over, and that companies will add technology to increase productivity. He likes business-to-business companies in particular. He also likes energy, specifically the integrated oil sector. He added that he likes "bond-like" equities -- stocks that offer a fixed return -- which will be important once higher interest rates take hold.