"With the S&P down 2.1 per cent it is entirely predictable that we would see weakness on the New Zealand market."
But he said, in reality, the local market had been pretty flat falling just 15 points over the last six trading days.
"People do need to look at the bigger picture rather than the last 24 hours," he said.
Smalley said while New Zealand was following the trend to go lower the magnitude of the fall was less than overseas markets were seeing.
"We have been through the reporting season and the majority had a good result."
He said the strong dividend yields paid by New Zealand's listed companies was supportive of the market even though interest rates were rising.
"It's not the same level of decline we saw in bigger markets."
But New Zealand had also not benefited from as much of the rise seen overseas which had been driven by technology stocks.
Smalley said the New Zealand market would probably sit on the sidelines a bit until the Australian and Asian markets opened later today which would provide more of a guide.
The fall in American sharemarkets was spurred by Donald Trump's announcement of trade tariffs for China, followed by the Asian nation hitting back - prompting fears of a trade war between the two superpowers.
Smalley said it was hard to know what kind of impact that would have but the world had been increasingly based on liberalising trade and this move appeared to a reversal of that.
"One thing markets don't like is uncertainty," he said.
Smalley said some investors may see the trade situation as too hard to understand which could result in people taking money off the table to make gains after having had a good run.
"No one really knows how it is going to affect asset prices."
But he urged investors to keep an eye on the bigger picture which was more about interest rate rises and where the dollar was headed.
"If people really think trade is going to be affected we would see a sell-off in the Kiwi [dollar] and that hasn't happened."
