Investors who want to see gains even during a potential “summertime snooze” should hide out in some typical defensive areas of the market, according to CFRA Chief Investment Strategist Sam Stovall. The S & P 500 has gained an average of only 1.6% between the Memorial Day and Labor Day holidays since 1945, despite rising in price in two out of every three years, Stovall wrote in a recent note to clients. June’s historical average return comes out at just 0.1% while July typically sees a 1.2% gain, according to Stovall. “So, for the entire three-month period, instead of experiencing the summertime blues, it frequently enjoys a summertime snooze,” he said. That dovetails with the popular “sell in May and go away” adage, which suggests that investors tend to back out of stocks in the early summer months and pile back in during the fall. Even in the face of a potential summertime slowdown, Stovall is optimistic that the S & P 500 will end the year around 5,470 and in 12 months reach 5,610. The index traded near 5,425 late Wednesday. Summer exception This summer could prove to be an exception to the typical summer lull, given the upcoming presidential election, Stovall said, noting that the broad market index has posted an average 3.7% summer increase during the 19 election years since World War II. “This year could record a similarly tepid uptrend, though with higher volatility, as investors weigh climbing valuations with forward earnings forecasts and the start of a new monetary easing cycle, within the confines of a hotly contested and acrimonious presidential pre-election period,” Stovall said. Ahead of this year’s election, Stovall expects a few aerospace and defense contractors to stand out. Traditionally defensive groups such as consumer staples and health care should also do well in the case of a broader market slump between May and October, he said, mentioning CFRA picks Eli Lilly and Walmart . Here are Stovall’s favored names: According to Stovall, companies such as Lockheed Martin and General Dynamics “should end up doing fairly well.” He expects both Democrats and Republicans to promote the need for increased defense spending during the election. CFRA’s proprietary indicators are positive for both companies and the aerospace defense industry in general, he said. Shares of Lockheed Martin are up 1.4% this year, significantly underperforming the broader market, while General Dynamics has advanced 13.4%. Better defense sentiment Sentiment has improved in recent months, Morgan Stanley wrote in a recent note, saying in late April that the U.S. government’s top defense contractors, including Lockheed Martin, were trading at about a 15% discount to the S & P 500. Other areas of the market that should survive and thrive during a slow summer period are consumer staples companies, tobacco names, health-care distributors and pharmaceuticals, Stovall said. He recommended big-box retailers Costco , Walmart and BJ’s as top discretionary picks, and Eli Lilly and Becton Dickinson as the firm’s favored health-care stocks. Costco and Walmart shares are up roughly 29% and 2% this year, respectively, posting strong returns as consumers have become more motivated by price and value in a high-inflation environment. BJ’s is similarly up about 32% for the year. JPMorgan upgraded Walmart on Monday to overweight from neutral and raised its price target on the stock to $81, implying a 21% gain from its previous close. “We believe the stock adds a strong balance of defense and offense on both the top and bottom lines in a soft (to softening) consumer backdrop with a highly uncertain 2H24 ahead,” JPMorgan analyst Christopher Horvers wrote in a note to clients, adding that he expects Walmart to see multiyear double-digit earnings per share growth given “market share gains, rising alternative profit pool benefits, and its International segment profit inflection.” Medical equipment maker Becton Dickinson is down 4% in 2024, but analysts polled by FactSet say the stock is overweight and think shares could gain 8%.