Preheat oven to 350 degrees F (175 degrees C). Sift the confectioners' sugar into a shallow bowl, stir in the walnuts, and set aside.
Beat the shortening, butter, cream cheese, and sugar together in a bowl until the mixture is creamy and thoroughly blended. Mix in the almond extract, vanilla extract, and flour; stir to combine. Scoop up dough by rounded tablespoons, and roll into balls about 1 inch in diameter. Place the balls about 1 1/2 inches apart on ungreased baking sheets.
Bake in the preheated oven until the cookies turn slightly golden at the edges, about 6 minutes. Let the cookies cool on the baking sheets for about 1 minute, then roll in the confectioners' sugar-walnut mixture while still a little warm.
