As Australia gears up for the Federal Government's budget on Tuesday evening, many ASX shares are in the spotlight in anticipation.
Federal Treasurer Josh Frydenberg is expected to address issues of inflation, travel, costs of living and infrastructure, and, in particular, jobs.
It's an interesting time for the Australian economy, with a number of tension points winding up from each end of the rope, so to speak.
Below is Australia's terms of trade account, house price index, inflation-adjusted GDP growth and productivity trends since the year 2000.
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What can we expect?
Frydenberg has said that while the employment rate was at a near-50-year low, the "budget will create an additional 40,000 jobs across Australia, building on our world-leading economic recovery".
He is expected to deliver a large budget deficit, according to analysis from BDO Australia, although with "projections of a stronger-than-expected economic outlook, supported by sustained low unemployment rates and expected growth in real GDP".
Prime Minister Scott Morrison also announced a package of around $18 billion for new and existing infrastructure projects, Bloomberg reports, "taking the government's rolling 10-year investment pipeline to A$120 million".
It is also investing "an additional $60 million to bring back international visitors to the regions hardest hit by international border closures", according to a statement last week.
This includes $15 million for tourism in Tropical North Queensland and to promote the Great Barrier Reef, and $45 million for Tourism Australia "to get international tourists back in to key regional destinations heavily impacted by the loss of international tourism".
Not only that, but the treasurer is expected to roll out a manufacturing package of more than $1 billion to speed up investment in new industry, The Australian reports.
So with that in mind, what stocks should investors pay attention to as the numbers are revealed this evening?
Which ASX shares to watch?
According to analysis from Jackie Edwards, equity markets Asia at Bloomberg, "Australian consumer and infrastructure-related shares will be in the spotlight".
Utilising data compiled by Bloomberg's proprietary artificial intelligence (AI) algorithms, Edwards notes several ASX shares that might be worth checking in reaction to tonight's budget.
In travel and tourism, Edwards says to look at names like Qantas Airways Limited (ASX: QAN), currently trading up 0.58% at $5.17 apiece today. Qantas is front and centre of Australian travel, and is deeply entrenched into international and domestic travel lines.
Within infrastructure spending, she says the $18 billion planned expenditure could benefit names such as BlueScope Steel Limited (ASX: BSL), currently up 1.15% today at $21.96.
Bluescope shares have rallied hard in the past month and are now trading 4% higher for the year after climbing from deep lows.
Not only that, but Prime Minister Scott Morrison has laid out seven areas of high importance in domestic manufacturing, Edwards says, ranging from onshore manufacturing to pharmaceuticals.
This kind of manufacturing push is sure to benefit ASX shares such as CSL Limited (ASX: CSL), Edwards notes.
Analysts at JP Morgan agree with Edwards' assessment and note CSL's "market-leading position" in a recent note. It said this position remains unchallenged, and that it expects the company to print a strong rebound in sales for FY23.
The firm is overweight on CSL and values the company at $295 per share, around $30 per share upside at the time of writing.
Six-month returns for each of these ASX shares are plotted below.
