CHATHAM CAPITAL GROUP Investment Review & Outlook June 30, 2026 Savannah, Georgia · Hilton Head Island, South CarolinaContents I.Review II.Outlook III.Capital Markets IV.Conclusions & Portfolio StrategyI. Review •The Iran conflict appeared to be largely settled by the end of June based importantly on the sharp drop in oil prices. •More telling than any single event was what didn't happen: China stayed publicly silent throughout, even meeting with Trump mid-conflict. •A Gulf war that neither widened nor pulled in the major powers is why policy uncertainty fell across the first halfof the year. WTI Crude Oil —2026 Year to Date Weekly Average Spot Price ($ per Barrel) US Economic Policy Uncertainty Index Indexed, January 2026 = 100 3 CHATHAM CAPITAL GROUPSource: U.S. Energy Information Administration | PolicyUncertainty.comI. Review •Higher oil prices as well as higher prices from other sources led to an increase in the rate of inflation. •On June 17, in his first press conference as Federal Reserve Chair, Kevin Warsh made clear he regards inflation as too high. •Together, these swung market odds on short-term rates decisively, shifting expectations from cuts by year-end to hikes. US Inflation: Headline CPIand Core CPI Year-over-Year (%) Market Expectations for December 2026 Federal Funds Rate Implied Probability (%) 4 CHATHAM CAPITAL GROUPSource: U.S. Bureau of Labor Statistics | CME | Federal Reserve *Note: CPI is Consumer Price IndexI. Review •Corporate earnings in the first quarter far exceeded expectations. •Company managementteamsprovided strong outlooks for the rest of 2026, with full-year growth estimates increasing from 17% before first-quarter earnings were announced to 24% after the quarter. S&P 500 EPS Growth: Estimates Before vs. After Q1 Earnings EPS Growth (%) 5 CHATHAM CAPITAL GROUPSource: FactSet | Goldman SachsI. Review •Despite substantially higher oil prices for most of the first half of the year, consumer spending accelerated over the course of the Iran conflict. •Even excluding gasoline, spending grew about 4% year-over-year in each of March, April, and May, the fastest ex-gas pace in three years. Card Spending per Household Card Spending per Household, Year-over-Year (%) 6 CHATHAM CAPITAL GROUPSource: Bank of America InstituteI. Review •High corporate earnings growth, projected at 24% for 2026, several years into an economic expansion is exceptional by historical standards. •Spending on Artificial Intelligence (AI) and AI infrastructure drove much of the earnings growth. Goldman Sachs estimates nearly half of the growth came from AI-related sources. AI Contribution to S&P 500 Earnings Growth 7 CHATHAM CAPITAL GROUPSource: Goldman SachsI. Review •In a clearly unsustainable trend, the rate of growth in consumer spending has outpaced growth in personal income over the last several quarters. •U.S. household net worth has increased by more than $88 trillion over the last ten years alone, importantly due to stock market appreciation. At least some of that increase in wealth is going toward spending. Annual Growth: Personal Income vs. Personal Spending Year-over-Year (%) Households —Net Worth $ Trillions 8 CHATHAM CAPITAL GROUPSource: FRED | Bureau of Economic AnalysisI. Review •Strong earnings, a spending consumer, and the calming of the Iran conflict outweighed higher inflation, resulting in strong equity gains in the second quarter and for the first half of the year. •Receding geopolitical risks led to declines in gold and Treasury bonds, as their safe-haven value diminished. Returns by Asset Class —Q2 2026 and First Half 2026 Total Return (%) 9 CHATHAM CAPITAL GROUPSource: Chatham Capital Group analysisNext >